Political Association, Haritable Donation And Bank Loans Of Private Enterprises

With the rapid development of China's market economy,the private economy has become an important part of China's national economy.Providing a favorable environment and helping to solve the bottleneck for private enterprises are the keys to ensure the sustained and healthy economic development.At the same time,people's living standards are rapidly improving,the Public service demand also showed explosive growth.Local governments,as the main providers of public services,are facing financial pressures.Charitable donations are in line with the law and consistent with the Chinese traditional values.So local government is pleased to accept a source of funding from private enterprises by the way of Charity donations.Based on the theory of social exchange,the theory of social capital and the theory of resource dependence,this paper argues that China's private enterprises and local governments,in the process of long-term mutual game,has formed a relationship of resource exchange.Private enterprises exchange credit resources to the government at the cost of charitable donations.Based on the panel data of listed private companies in China from 2012 to 2015,the empirical results show that: First,charitable donation is a kind of strategic behavior of private enterprises,which aims at exchanging resources with local governments.At the same time of meeting the local government's functions of providing public service,to obtain credit resources to support their own development.That is,charitable donations have a significant positive effect on its bank loans.Second,in the institutional environment with low degree of marketization,the political association regulates the relationship between charitable donation and its bank loan.Compared with the non-political association companies,private enterprises which have political association,the positive correlation between its charitable donation activities and bank loans is more significant.In the institutional environment with high degree of marketization,the political association does not affect the relationship between the charitable donation and its bank loan.Based on this,this paper concludes that it is necessary to construct the healthy and harmonious government-business relationship,which needs to make efforts from four aspects,including the establishment of healthy communication channels between government and enterprises,improve the system of government power to exercise,cultivate the autonomy of private enterprise and build new government culture.