Major corporations often respond charitably in times of disaster. However, disasters can also impose nontrivial costs on firms themselves, and under adverse conditions, firms typically donate less, not more. This paper takes a strategic perspective on corporate magnanimity in times of crisis by looking at the relationship between firm value, reputation, and donations by U.S. Fortune 500 firms in the case of Hurricane Katrina. In general, we find that Katrina's landfall was associated with significant negative abnormal stock returns. In particular, we find that a reputation for social irresponsibility was associated with both the greatest drop in stock prices and the greatest likelihood of making a subsequent charitable donation in response to the disaster. Copyright © 2011 John Wiley & Sons, Ltd.

corporate philanthropy, employee involvement, firm value, Hurricane Katrina, sensegiving,

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This paper analyzes the impact of blockownership dispersion on firm value. Blockholdings by multiple blockholders is a widespread phenomenon in the U.S. market. It is not clear, however, whether dispersion among blockholder is preferable to having a more concentrated ownership structure. To test for the direction of the effect, we use a large dataset of U.S. firms that combines blockholder information, shareholder rights information, debt ratings, accounting information, and financial markets information.We find that a large fraction of aggregated block ownership negatively affects Tobin's Q. The negative impact is larger if blockowners are more dispersed, suggesting that a concentrated ownership structure is to be preferred on average. Results are robust to controlling for blockholder type as well as proxies for shareholder rights. Our empirical findings are also confirmed if we study the impact of ownership dispersion on firm debt ratings rather than Tobin's Q.