Charity Donation And Stock Price Collapse Risk

In recent years,with the frequent occurrence of a series of extreme weather and natural disasters,as well as the constant awakening of civil society awareness,the charity donation,a charitable act,has attracted more and more social attention from all walks of life.With the continuous progress of the times,the forms of charitable donations have become increasingly complex.From the initial Red Cross Societies,which is donated from live activities,and One Foundation,which is donated from bank transfer,to the now hot "Internet + public interest","Children Gallery" autism screened from WeChat circle of friends Donated to the Ant Farm on Alipay,it seems that charitable donations have completely penetrated into the daily life of the social public.The corporate charity donation has also become a hot topic in the academic community.Whether corporate charitable donations are motivated by fulfilling corporate social responsibilities or benefiting the entire society,or using charitable donations to conceal certain negative things or divert attention from outside companies,or the management using charitable donations to improve its impression,is still the focus of debate among scholars.In addition,as the domestic market becomes more open,the overall capacity of China stock market has increased a lot,but the stock price volatility has only changed in one way,becoming more and more violent.From the financial crisis in 2008,the Shanghai stock market's A-share index dropped sharply,from 6,600 to 6,100.In recent years,the Shanghai-Shenzhen 300 index's secondary blow triggered,and the stock market's continuous collapse has increasingly touched the fragile nerves of investors.Then,can corporate charitable donations effectively mitigate the risk of a share price crash?In addition,with the increasing popularity of the Internet and the ever-increasing speed of information dissemination,we are in a space of information explosion every day.We receive numerous media reports from every channel we touched every day.In the West,media reports are often seen as "fourth right" independent of legislation,administration,and justice.So,in the context of China's special system and mechanism,can media reports play its due role in corporate governance?In order to explore these issues,based on the current literature research on corporate charitable donations,stock price collapse risk and media attention,this paper deeply explores the relationship between corporate charitable donations and stock price crash risk,and combines media attention to further explore whether media attention is for charitable donations.There is a moderating effect on the relationship with the risk of a stock price crash.Through normative analysis and empirical research,this paper finds:(1)Under certain other conditions,corporate charitable donations can reduce the risk of its share price collapse;(2)Media attention to a certain extent negatively correlates charitable donations with the risk of stock price collapses.The relationship plays a regulatory role,that is,the more corporate related news media reports,the higher the degree of reduction in the risk of future share price collapses by charitable donations.Through further analysis,it is found that:(3)After distinguishing the property rights of the corporations of charitable donations,compared with state-owned enterprises,the negative correlation between non-state-owned enterprises' charitable donations and the stock price crash risk is even more pronounced;(4)The higher the level of institutional environment in the region which the charitable donation company lies in,the more significant the relationship which the higher the corporate charitable donations,the higher the risk of the stock price collapses.(5)After differentiating media sentiment,compared with positive media reports,negative media reports play a stronger role in the negative correlation between charitable donations and the risk of stock price collapses.The potential contributions of this paper are as follows:At present,research on academia donation and stock price collapse risk in academic circles is still at a preliminary stage,with relatively few relevant documents.The existing domestic researches on the influencing factors of stock price crash risk are mainly based on information transparency,management behavior,corporate tax avoidance and other angles.Based on the non-financial angle of corporate charitable donations,this article supplements the content of relevant theories and enriches the research on related topics.In recent years,with the wave of informationization and the popularity of the Internet,the corporate governance role that the media are paying attention to has become increasingly prominent.Especially in countries where the legal system is not sound enough,the media as an independent "fourth right" may be a supplement to the formal institutional environment.By verifying media attention to the moderating effect of corporate charitable donations on reducing the risk of share price collapses,this article has enriched relevant literature on the role of corporate governance in the media and is conducive to enriching research literature in the field of "law and finance".In addition,this article has further explored the impact of media reports on the impact of corporate charitable donations to reduce the risk of share price collapses.With the continuous development of text mining technology,the research on the analysis of the emotional tendencies of news reports is also increasing,and some results have been produced in the study of the relationship between the media's emotional tendency and the company's stock price,litigation risk,and audit fees.This article analyzes the moderating effects of media reports on emotional trends,expands and enriches the theoretical research in related fields,and also provides a new perspective and richer content for a better understanding of the operation of the capital market and the decision-making of investors.It is of theoretical significance and practical value.The potential limitations of the paper are as follows:Since the amount of corporate charitable donations selected in this article is not a mandatory disclosure in the company's financial statements,this article only screened the Shanghai-Shenzhen A-share listed company that disclosed the charity donation project in non-operating expenses in the notes to the financial statements.Research samples may therefore lead to biases in the sample and affect the integrity of the sample data.In addition,some of the "non-public welfare donations" in non-operating expense subjects can be included in the charity donation category,but this article does not classify it into the sample data.If it is possible to further collect relevant data of enterprises that have not disclosed charitable donation data but have charitable donations,and further process the disclosed charity donation data,a more comprehensive and accurate conclusion may be drawn on this basis.