Gabriel Benito, from BI Norwegian Business School, will present "Do International Interorganizational Relationships Matter for Multinationals’ Corporate Philanthropy?"

Absctract: Engaging in vertical interfirm agreements with partners from institutionally weak environments increases exposure to ex-ante risks of these partners’ irresponsible behavior. One line of reasoning suggests mitigating potential misbehavior through vertical (re)integration. However, multinationals often resort to non-market strategies like corporate philanthropy to safeguard against these ex-ante risks. Using data on 168 listed U.S. firms from 2010–2020, we find that the weaker the institutional quality of a firm’s portfolio of international vertical partners, the more extensive its corporate philanthropy. This relationship is moderated by established control mechanisms – specifically, local subsidiary presence, and internal quality management systems, and relational embeddedness – as they allow curbing information asymmetry and fostering goal congruence. Finally, misalignment from the optimal level of corporate philanthropy limits firm value creation.