Simon Xu
ABSTRACT: This paper studies the effect of banks' philanthropic giving on their deposit market share. While banks are one of the largest corporate philanthropists, it has not been well understood why banks actively engage in philanthropic activities. We find that banks' donations to local non-pro fit organizations are positively associated with their deposit shares in local markets. Our evidence suggests that the result is driven by bank's strategic giving to non-pro fit organizations with sizable assets. Exploiting natural disasters in the United States, we mitigate endogeneity concerns in the link between bank donation and deposit market share.