Abstract

We investigate corporate giving behaviors of prestigious business award winners in Korea. In particular, we examine whether firms strategically use corporate giving to enhance corporate reputation. We find that award winners generally make more charitable contributions than nonwinners prior to winning awards and maintain significant charitable contributions after winning awards; multiple award winners make even more charitable contributions than single-award winners; and an increase in charitable contributions does not raise the probability of winning awards in the year after the increase. The results suggest that CEOs of award-winning firms do not use corporate giving opportunistically to enhance their status and reputation. Rather, significant charitable contributions by award winners may be indicative of a sound business strategy to maximize long-term firm value