Masters of disasters? An empirical analysis of how societies benefit from corporate disaster aid
Files
Accepted manuscript
Date
2017-10
Authors
Ballesteros, Luis
Useem, Michael
Wry, Tyler
Version
Accepted manuscript
OA Version
Citation
L. Ballesteros, M. Useem, T. Wry. 2017. "Masters of Disasters? An Empirical Analysis of How Societies Benefit from Corporate Disaster Aid" Academy of Management Journal, Volume 60, Issue 5, pp.1682-1708. https://doi.org/10.5465/amj.2015.0765
Abstract
Corporations have become increasingly influential within societies around the world, while the
relative capacity of national governments to meet large social needs has waned. Consequentially,
firms are being asked to adopt responsibilities that have traditionally fallen to governments, aid
agencies, and other types of organizations. There are questions, though, about whether or not this
is beneficial for society. We study this in the context of disaster relief and recovery; an area
where companies account for a growing share of aid as compared to traditional providers.
Drawing on the dynamic capabilities literature, we argue that firms are better-equipped than
other types of organizations to sense areas of need following a disaster, seize response
opportunities, and reconfigure resources for fast, effective relief efforts. As such, we predict
that—while traditional aid providers are important for disaster recovery—relief will arrive faster,
and nations will recover more fully when locally active firms account for a larger share of
disaster aid. We test our predictions with a proprietary dataset comprising information on every
natural disaster and reported aid donation worldwide from 2003 to 2013. Our analysis uses a
novel, quasi-experimental technique known as the synthetic control method and shows that
nations benefit greatly from corporate involvement when disaster strikes.