the effect of cause-related marketing on firm value: a look at fortune’s most admired all-stars

Companies are increasing their use of cause-related marketing as a means of communicating their commitment to corporate social responsibility while accomplishing their strategic goals. although prior studies suggest that consumers react positively to cause-related marketing programs, understanding of their impact on financial performance remains limited. to address this gap, the authors employ an event study to examine the effects of cause-related marketing announcements on shareholder value using a sample of firms that appeared on fortune’s most admired all-star list between 2005 and 2017. study results show that announcement of these initiatives results in a significant loss of shareholder value. these losses are most pronounced for firms making monetary-only contributions, in comparison to those that make in-kind donations. in addition, the negative effects are mitigated for firms that have stronger reputations, have greater resource slack, and operate in more dynamic industries. moreover, low-reputation and low-slack firms benefit most from in-kind contributions.