Corporate Reputation and an Insurance Motivation for Corporate Social Investment

): that of insurance. Building on a paper by Godfrey (2005), we argue that socialinvestment insures companies against stakeholder reactions to socially irresponsibleacts. We offer predictions regarding the distribution of insurance-motivated socialinvestment across firm characteristics, and highlight the possibility that this form ofinsurance drives firms towards greater social irresponsibility. Thus, we argue that theoverall impact on social welfare of insurance-motivated social investment is ambig-uous. An exploratory analysis shows the pattern of charitable giving among large