Effects Of Corporate Charitable Donations To Performance

Charitable giving has become the common behavior of enterprises, more and more enterprises begin to pay close attention on charity activities, with the enterprise’s actual action to return society, fulfill its social responsibility. In academic area, charity behavior research on enterprise has been one of the main problems in enterprise social responsibility and the relationship between corporate philanthropy and corporate financial performance is one of the most concerned aspects. Most of the researches find out that corporate charity donations can bring about many advantages, such as advertising benefit, enhance the brand awareness, increase the moral capital and get more social and political capital etc, but these researches have not reached the same conclusion.On the basis of theoretical analysis, this paper selected companies which listed on Shenzhen and Shanghai these two cities, then look for relevant database and annual reports of the listed companies to obtain relevant data and use these data to research the relationship between corporate philanthropy and the performance of listed companies.First of all, in terms of theory, combined with the existing research theories, This paper mainly from the response of stakeholders and resource dependence these two aspects to analysis the motives of enterprise charity’s donation and its impact on the performance;Second, in the empirical study, selecting2538companies listed on Shenzhen and Shanghai as the research sample, adopting the Heckman two-stage selection model then concluding the inverse mills ratio in order to effectively control the sample selection bias.Third, using a linear regression model to exploring the relationship between corporate philanthropy and the performance, and some relevant adjustment variables were also used to test the relationship between the two variables. Such as advertising intensity, marketization level, industry competition degree and government-enterprise relationship.The results show that, corporate philanthropy is positively affect the financial performance ROA but negatively affect TQ, advertising strength positively adjust the relations between corporate philanthropy and corporate financial performance ROA, and marketization level and government-enterprise relationship positively adjust the relations between corporate philanthropy and corporate financial performance TQ, but industry competition degree has a weak negative regulation role on the relations between corporate philanthropy and corporate financial performance.Finally, based on the results of the empirical research, this paper respectively from the view of enterprise and government puts forward some suggestions on the development of company philanthropy, also list study limitations and future research directions at the of this paper.