Can Socially Responsible Firms Survive Competition? An Analysis of Corporate Employee Matching Grant Schemes

72 Pages Posted: 19 Feb 2012 Last revised: 11 Jul 2017

See all articles by Ning Gong

Ning Gong

Deakin University; Financial Research Network (FIRN)

Bruce D. Grundy

University of Melbourne

Date Written: April 15, 2017

Abstract

Employee matching grant schemes are coordination mechanisms that reduce free-riding by socially-conscious employee-donors. Matching schemes coupled with lower take-home pay than offered by non-matching firms will survive capital and labor market competition if employee type is not observable and socially-conscious employees are more productive or value working together. Matching can enhance employee welfare and raise more for charity without reducing profits. We document that matching firms have higher labor productivity and are more likely to be ranked as one of the “100 Best” employers. The result is robust to managerial entrenchment concerns and is not confined to the high-tech sector.

Keywords: Employee matching grants, corporate social responsibility

JEL Classification: D03, D21, H41, L31

Suggested Citation

Gong, Ning and Grundy, Bruce D., Can Socially Responsible Firms Survive Competition? An Analysis of Corporate Employee Matching Grant Schemes (April 15, 2017). Available at SSRN: https://ssrn.com/abstract=2007643 or http://dx.doi.org/10.2139/ssrn.2007643

Ning Gong (Contact Author)

Deakin University ( email )

Department of Finance
Faculty of Business and Law
Burwood, Victoria 3125
Australia
+61 3 9246 8492 (Phone)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Bruce D. Grundy

University of Melbourne ( email )

Faculty of Economics & Commerce
Department of Finance
Victoria, 3010
Australia
+61 3 8344 9083 (Phone)
+61 3 8344 6914 (Fax)

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