| Abstract: | Corporate restructurings, by their very nature, are inherently disrupting. With managerial discretion potentially curtailed, the ripple effects of restructurings are likely to be widespread and long‐lasting. This paper examines one ripple effect of corporate restructurings: the effects of donations from corporate philanthropic foundations after acquisitions. By extending the business strategy merger and acquisition (M&A) literature to include philanthropic activities and applying the corporate citizenship literature to an M&A context, the author creates a model and tests hypotheses. Simultaneous examination of the impacts of corporate citizenship and business strategy is warranted in today's research on corporate restructurings, since larger acquisitions are occurring more frequently, and acquisitions have the potential to adversely affect large numbers of individuals. As ever‐larger firms consolidate, with record‐breaking merger announcements, the potential for increased scrutiny by the media, shareholders, anti‐trust officials and salient stake‐holders is heightened. These findings, contrary to predictions, suggest that corporate philanthropy increases during the first year after an acquisition within the same industry. Moreover, the increase is sustained. Philanthropic donations continue to increase three years after acquisitions within the same industry. Implications for public affairs executives is examined. Copyright © 2004 Henry Stewart Publications |
