Doing well by doing good? Quasi-experimental evidence from corporate philanthropy in banking

This paper asks whether a highly visible corporate-philanthropy campaign raises a bank’s market valuation. We study Bank of Chile’s two-decade role as official sponsor of the national Teletón , using daily share prices for all four listed Chilean banks between 2000 and 2020, spanning sixteen editions of the campaign. We compare Bank of Chile’s stock performance around each campaign with that of the other banks, first using share-price levels and then using measures that strip out ordinary market movements, such as daily returns and abnormal returns. Price levels suggest a positive, significant effect, seemingly supporting the idea that doing good pays off financially. This turns out to be an artifact of how stock prices drift over time: once we look at returns instead of levels, the effect disappears entirely, becoming negligible and statistically indistinguishable from zero, consistently across benchmarks, estimation choices, and each edition. We conclude that this sponsorship left no measurable footprint on shareholder value, neither a benefit nor a cost. If such philanthropy creates value, it likely accrues gradually, through customer loyalty and reputation, rather than through daily stock prices. The broader implication is methodological: claims about the financial effects of one-off corporate events should be tested on outcomes that filter out ordinary price trends, not raw price levels, which can manufacture an effect that is not really there. A limitation is that we measure sponsorship visibility rather than the undisclosed monetary value of donations, and that only four banks are listed on the exchange, limiting statistical power.