The Signaling Role of Charitable Contributions by Businesses: A Tax Policy Perspective

Tomer Blumkin; Yoram Margalioth; Efraim Sadka; Adi Sharoni

doi:10.1093/aler/ahab013

The Signaling Role of Charitable Contributions by Businesses: A Tax Policy Perspective

Tomer Blumkin
, Yoram Margalioth
, Efraim Sadka
, Adi Sharoni

Ben-Gurion University of the Negev, Tel Aviv University

Research output: Contribution to journal › Article › peer-review

Abstract

Empirical evidence suggests that charitable contributions to public goods by businesses may be driven not only by the familiar warm glow of giving motive but also as a means for businesses to signal high product quality. Building on this finding, we present an analytical framework that demonstrates that the optimal degree of subsidization should decrease with the extent to which the signal is informative and may even turn into a tax when the signal is sufficiently strong.

Original language	American English
Pages (from-to)	87-115
Number of pages	29
Journal	American Law and Economics Review
Volume	24
Issue number	1
DOIs	https://doi.org/10.1093/aler/ahab013
State	Published - 1 Jan 2022

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 17 Partnerships for the Goals

ASJC Scopus subject areas

Finance
Law

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10.1093/aler/ahab013

Cite this

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abstract = "Empirical evidence suggests that charitable contributions to public goods by businesses may be driven not only by the familiar warm glow of giving motive but also as a means for businesses to signal high product quality. Building on this finding, we present an analytical framework that demonstrates that the optimal degree of subsidization should decrease with the extent to which the signal is informative and may even turn into a tax when the signal is sufficiently strong.",

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AU - Sharoni, Adi

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AB - Empirical evidence suggests that charitable contributions to public goods by businesses may be driven not only by the familiar warm glow of giving motive but also as a means for businesses to signal high product quality. Building on this finding, we present an analytical framework that demonstrates that the optimal degree of subsidization should decrease with the extent to which the signal is informative and may even turn into a tax when the signal is sufficiently strong.

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The Signaling Role of Charitable Contributions by Businesses: A Tax Policy Perspective

Abstract

UN SDGs

ASJC Scopus subject areas

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