Investor Responses to Corporate Donation Frequency Strategies: The Mediating Roles of Bidirectional Motive Attributions

Abstract

Corporate donation is an important business strategy, but not all donations can yield the expected positive outcomes. Thus, it is urgent to know what donation strategies firms should use to obtain positive responses from different stakeholders. By conducting two experimental studies, we explore which donation frequency strategy, one-time or multiple-time donations, drives more positive investor responses and the difference in the mediating roles of altruistic/egoistic bidirectional motive attributions. The results show that for donation projects supporting ongoing causes, a multiple-time strategy leads to investors having more positive judgments of a firm’s future earnings prospects and higher investment desirability rather than a one-time strategy because it induces more altruistic attributions. Although investors make both altruistic and egoistic attributions for both strategies, only the mediating role of altruistic attribution exists, whereas that of egoistic attribution does not. Our research contributes to the study of corporate donation strategies and corporate social responsibility (including corporate donation) motive attribution, providing valuable insights for academic research, corporate decision makers, and stakeholders invested in responsible business practices.