Institutional Disruptions and the Philanthropy of Multinational Firms

This paper studies philanthropy by multinational enterprises (MNEs) during institutional disruptions—the sudden and unexpected, temporary, systemic breakdowns in market-oriented institutions. The central argument is that, under disruptions, MNEs aim to restore factors that are essential for the market function, such as infrastructure labor markets, strength of restoration motive positively associated with economic importance affected country MNE. Analyses donations from 2,000 headquartered 63 countries aftermath 265 major epidemics, natural disasters, terrorist attacks affecting 129 suggest firm strongly explains donations. Country concentration, public aid, country’s regulatory quality moderate this effect. These associations robust a matching method; vector firm-, country-, event-specific time-varying -constant variables; alternative motives, reputation, altruism, media salience, standing, poverty-gap avoidance. They offer evidence company disruptions may deviate predicted behavior stable conditions. Particularly, findings contest expectation rises competition. Monopolistic firms comparatively large donors act an stop-loss mechanism disruptions.