Corporate Philanthropy, Research Networks, and Collaborative Innovation

Abstract

Using a unique dataset of corporate philanthropy, we find that direct giving activities are positively associated with higher levels and more influential, collaborative, and original innovation. In contrast, our results do not hold for corporate foundations’ contributions. Our results suggest that much of what is ostensibly promoted as philanthropy actually reflects research-related networking activities. The effect of direct giving on innovation is more pronounced in more opaque firms and more innovative and competitive industries. These findings provide evidence of the distinct motives by which firms choose between direct giving and foundation giving. Our study suggests that firms can use direct philanthropy to expand firm-boundaries by developing innovation with research partners.