Corporate donations and religiosity: Cross-country evidence

Corporate philanthropy varies substantially across countries. This study explores whether the degree of religiosity prevailing in the country where a firm is located helps explain such variation. Using a large sample of firms from 41 countries, I find that firms located in more religious countries donate more than those located in less religious countries. Moreover, I show that the religiosity-donation association is mainly driven by managers catering to stakeholders' preferences rather than managers' own preferences. Finally, I find that firms set their donations at an optimal level. My results are robust to a battery of sensitivity analyses and are confirmed by a quasi-natural experiment.& COPY; 2023 Elsevier B.V. All rights reserved.