Research On The Impact Of Charitable Donation On Corporate Financial Performance

In recent years,due to the frequent natural disasters,more and more enterprises engaged in philanthropy,corporate giving has become the most important source of community donations,and the degree of public concern about the behavior of charitable donations by companies is increasingly high.With the development of corporate charitable donations,the problems of whether charitable donations affect the corporate financial performance and how many donations can meet the public's expectations and other issues become the focus of enterprises' concern.And these issues are also the academic problems needed to be resolved.So,an in-deep investigation into the effects of charitable donations on corporate financial performance will not only help corporates make the right charitable decisions,but also be important for the healthy development of philanthropy.This essay researches the impact of China's listed companies' charitable donations on corporate financial performance by normative and empirical analysis methods.In addition,this essay innovatively introduced a dummy variable of whether the donation information disclosure in corporate social responsibility report,examining its impact on the relationship between corporate charitable donations and corporate financial performance.Firstly,through collating and summarizing the relevant researches on corporate charitable donation,this paper analyzes the motives,influence factors,mechanism of corporate charitable donations and the status of corporate charitable donations and problems of our country.And combined with stakeholder theory,strategic philanthropy theory and reputation theory,this paper proposes the hypotheses.Secondly,this paper select A-share listed companies in Shanghai and Shenzhen Stock Exchange from 2010 to 2013 as samples,and use the ratio of donation amount and operating income to measure the level of corporate charitable donations,the return on total assets to measure corporate's short-term profitability and Tobin's Q to measure corporate long-term profitability.Then we adopt multivariate regression models to check the hypotheses.Finally,based on the conclusions,this paper makes several recommendations on the development of corporate charitable donations,and also points out the limitations of this study and the direction of future research.The results of this research indicate that,corporate charitable donations and corporate financial performance are positively correlated,whether the corporatefinancial performance is measured by accounting index or market indicator;the disclosure of corporate philanthropy through the corporate social responsibility report can enhance the positive impact of charitable donations on corporate financial performance.This conclusion complements and enriches the research in the field of charitable donations and also provides a reference for enterprises to develop a more comprehensive strategy of corporate charitable donations,which has theoretical and practical significance.