Does corporate image affect donation effectiveness? Evidence from the Taiwan stock market

Does corporate image affect donation effectiveness? Evidence from the Taiwan stock market

In recent years, ESG issues have garnered widespread attention, making the enhancement of corporate image an essential topic. Among various methods to improve corporate image, charitable donations are viewed as one of the most direct and common approaches. This study aims to investigate whether corporate donations receive positive recognition from investors, thereby impacting stock returns, and further examines whether the quality of a company’s image influences investor perceptions of donations, leading to varied stock return responses. We utilize an event study methodology and regression analysis to examine the impact of 2,778 donation events by publicly listed companies in Taiwan from 2012 to 2022 on stock returns, as well as to assess the effect of corporate image quality on these outcomes. Results indicate that corporate donations indeed contribute to enhanced stock returns, with companies possessing a stronger image exhibiting a more significant positive impact on stock performance.