Study On The Relationship Between Institutional Investors And Corporate Philanthropy Under The Internal Governance Mechanism

Economic development makes the global economy increasingly integrated, and the influence of enterprise also gradually penetrate into all aspects of social life. As one of the ways to demonstrate corporate social responsibility (CSR), donation has been recognized by society gradually. Therefore, will the enterprise donate a lot on the base of the wishes of the masses or in strict accordance with the internal rules of the company? As the external controllers, will the institutional investors hold the same attitude with the public on the donation? Can they bring some influence on charitable donation by taking part in the company's internal governance?With the existing research results of scholars at home and abroad for reference, according to the new classical economics theory, corporate internal governance theory, corporate philanthropy theory and institutional investors'theory, the paper analyzes the influence of corporate internal governance and institutional investors on corporate philanthropy, and further analyzes whether institutional investors can influence corporate philanthropy by the corporate internal governance. In the end, based on the data of all A-share listed companies involved in charitable donations in the stock markets of Shanghai and Shenzhen from 2004 to 2014, the paper studies how the corporate internal governance and institutional investors influence the corporate philanthropy, and further discusses the problem whether institutional investors can influence corporate philanthropy by adjusting the internal management of listed companies.The paper reveals that the enterprises which have the bad internal governance do tend to donate more. However, the institutional investors promote expenditure of corporate philanthropy. Furthermore, shareholding of external institutional investors can participate in company internal governance to some extent, which have a correction effect on corporate philanthropy, that is to say, higher shareholding percentage of institutional investors can discourage corporates which have poor internal governance to donate more, whereas, this has little effect on donation of the corporates which have good internal governance.