While corporate philanthropy is often viewed as a means for firms to contribute positively to society, research shows that it can also yield significant strategic benefits for firms. However, these benefits vary depending on how firms allocate their philanthropic resources, and this can sometimes lead to giving strategies that enhance financial performance at the expense of social impact. 

• Haram Seo, Jiao Luo, & Aseem Kaul. 2021. Giving a Little to Many or a Lot to a Few? The Returns to Variety in Corporate Philanthropy.
  Strategic Management Journal.

  • Although specialization—giving a lot to a few causes—is generally considered more socially beneficial, this research reveals that firms often gain greater strategic benefits from diversification—giving a little to many causes—because it allows them to cater to a broader range of stakeholder preferences. This finding suggests that market pressures may drive even well-intentioned firms to adopt giving strategies that are less socially beneficial.

• In a related working project (with Madeline Ong, Nicholas Olson, & Connor Idso, Texas A&M), we extend these findings by examining the conditions under which the misalignment between strategic and social impact can be mitigated using a real-effort experiment. Specifically, we investigate when stakeholders are more likely to reward a firm’s specialized philanthropic efforts.

• Jiao Luo, Aseem Kaul & Haram Seo. 2018. Winning Us with Trifles. Strategic Management Journal. 

  • Another critical issue in the strategic use of philanthropy is that “bad” firms may have stronger incentives to engage in charitable giving than “good” firms, due to the reputation insurance effect of philanthropy. We demonstrate this adverse selection problem in the use of corporate philanthropy as reputation insurance in the US oil industry.

  • In an early-stage project (with David Tan, Johns Hopkins), we build on this project and investigate the mechanisms underlying the insurance effect of corporate philanthropy, focusing on the prescription opioid industry. Our goal is to disentangle whether this effect stems from 1) a reduced likelihood that stakeholders will discover the harm caused by “good” firms due to lower monitoring efforts vs. 2) stakeholders' willingness to overlook such harm because they perceive the firms' philanthropic actions as providing broad social benefits that outweigh the negative impacts.

• Jiao Luo, Aseem Kaul & Haram Seo*. Gotta serve somebody: The elitist nature of U.S. corporate philanthropy.
  Revise & Resubmit at Administrative Science Quarterly.  (*Equal authorship)

  • In this project, we explore another dimension of the divergence between strategic benefits and social impact, focusing on geographic misallocation of corporate donations relative to actual social needs. Our analysis shows that corporate donations are disproportionately directed to affluent urban areas with high levels of education and income, and are largely unresponsive to changing economic conditions in other communities.

My second stream of research delves into how firms navigate the growing ideological polarization in their stakeholder environments, particularly through unconventional uses of philanthropy. 

• Haram Seo. Competitive Dynamics of Corporate Activism: Asymmetric Responses from Ideological Ally and Opponent.
  Forthcoming at Organization Science.

  • As corporate activism scholarship suggests, one common response to increasing polarization is for firms to take public stances that signal ideological alignment with key stakeholders, such as employees. However, while existing research highlights the role of employee ideology in driving corporate activism, it has yet to fully explore the heterogeneity in its effects. In this paper, I address this gap by examining the conditions under which firms are more likely to act on employee ideology. Using corporate donations to activist groups (e.g., Planned Parenthood) as a channel to systematically track instances of corporate activism at a large scale, I demonstrate that the activism of a firm’s competitors can serve as a critical external contingency. Specifically, I find that when ideological opponents—competitors who take a stand against what the firm’s employees value—engage in activism, it prompts the firm’s own activism, especially in forms of counter-activism against those opponents to support its employees' values. 

• Haram Seo. Navigating Ideological Tension: Evidence from Corporate Use of Charity-as-Access to Target Ideologically Misaligned Politicians.
  Finalizing for submission to Strategic Management Journal. 

  • This project examines how firms manage the constraints imposed by employee expectations of ideological alignment in their CPA efforts. While signaling ideological alignment can strengthen a firm’s relationship with its employees, it can also create challenges in maintaining relationships with other stakeholders, such as politicians who are ideologically misaligned with the firm’s workforce. These constraints can be costly, as misaligned politicians may hold strategic importance to the firm, serving on key committees that influence policies central to the firm’s interests. Despite the significance of this issue, existing scholarship has largely overlooked how firms manage this growing tension between employee expectations and the need to maintain political access. This study offers one answer to this question. I demonstrate that firms can use an opaque channel of political access to engage with ideologically misaligned politicians, specifically by making charitable donations to nonprofits connected to these politicians through board memberships. 

  • In a related working project (with Bo Yang, HKU Business School), we explore how firms strategically decouple their political engagement by distinguishing between highly visible, traceable channels and less visible, opaque ones. Specifically, we analyze how firm responses and shifts in various CPA repertoires evolved following the U.S. Capitol Insurrection, shedding light on how companies adapt their political strategies in response to heightened stakeholder scrutiny and ideological polarization.

In this research area, I explore the connection between a broad range of nonmarket strategies and firm innovation. While existing scholarship has extensively examined the role of philanthropic and other nonmarket strategies in various financial and operational outcomes, their link to innovation—a key driver of a firm’s long-term competitive advantage and an important way in which firms contribute to social welfare—remains underexplored.

• Corporate Social Irresponsibility and Firm Innovation: Evidence from Regression Continuity Design. Under review.
  (with Eunkwang Seo, Oklahoma State, and Junbeom Park, UIUC)

We employ a regression discontinuity design to demonstrate that the public disclosure of corporate misconduct and the resulting damage to stakeholder relationships can have unexpected positive consequences on firm innovation. This finding challenges conventional wisdom by suggesting that adversity in stakeholder relations may sometimes spur innovative efforts within firms.

• Gaming the System: Evidence from China’s Strategic Emerging Industry Initiative. Finalizing for submission to Organization Science.
  (with Kishore Gawande, UT Austin, and Hua Cheng, Nankai U.)

This project investigates how the absence of political connections—an important tool in a firm's nonmarket repertoire, particularly in emerging markets like China—can lead to opportunistic behavior in innovation, such that firms without political ties inflate patent applications to attract government subsidies. 

• Social impact in the beauty industry. Data Analysis
  (with Natalie Carlson, Wharton, and May-Anne Very, IESE Business School)

We explore how regulatory efforts to increase the social impact of firms’ operations, such as the EU’s animal testing ban in 2013, has had unintended negative consequences on firm innovation, making the net welfare effect ambiguous.