Is corporate community involvement associated with poverty and income inequality? International evidence

ABSTRACT

This study explores the relationship between economic conditions and corporate community involvement (CCI) across an international dataset of 7,926 firm-year observations from 33 countries during 2013–2019. We investigate whether and how poverty levels and income inequality within a country are associated with firms’ engagement in social welfare initiatives. Our findings suggest that firms are more active in community contributions in the presence of severe poverty and greater income inequality. Specifically, in developed countries, both factors are strongly linked to CCI, while in developing countries, CCI primarily correlates with income inequality. This research contributes to the literature by showing that firms adjust their ESG strategies based on country-specific economic conditions.

KEYWORDS:

• Corporate community involvement
• poverty
• income inequality
• Gini index

JEL CODE:

• M14
• D63
• I32

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ A list of RE100 member firms: https://www.there100.org/re100-members

² 0.7% of corporate pre-tax profits have been spent for giving in 2021.

³ UN Secretariat’s webpage link: https://desapublications.un.org/publications/world-economic-situation-and-prospects-2022

Additional information

Funding

This work was supported by the National Research Foundation of Korea [2023S1A5A8081512].