Research On The Influence Of Inter-generational Heritage On Corporate Charitable Donations

The peak of China's family business "succession" has come,more and more scholars pay attention to inter-generational inheritance of family business.The current research focuses on discovering why family businesses choose inter-generational transmission within the family,how to choose heirs and inheritance process,building inheritance model and finding the standard of successful transmission.With time going on,the researches began to focus on the performance changes brought by inter-generational transmission.However,performance is the result of corporate behavior.Inter-generational inheritance will first affect the strategic behavior of enterprises,then affecting business performance.The inter-generational transmission of family business involves the transfer of ownership and control over the enterprise.The inheritance also means the transmission of various resources,embodied in the transfer of power that is the replacement of business leaders.The changing of leader will break the organizational routine,and will be subject to pressure from inside and outside environment.These factors will have an impact on corporate charitable donations: Firstly,although corporate charitable donations is an organizational behavior,corporate donation decisions are made by business leaders.The decision making process influenced by the personal characteristics,values,educational background and other characteristics of leaders;Secondly,the heirs may use corporate charitable donations as a respond of the doubt of their legitimacy and authority;At the mean time,strategic charity is a good way for family businesses to deal with social pressure;Finally,inter-generational heritage breaks the organizational routine which affects charitable donation.Based on High-level Management Echelon Theory,Stakeholder Theory and Organizational Routine Theory,this paper first analyzes the mechanism of inter-generational inheritance of family business on corporate charitable donation.Then,reviews the relevant research results,analyzes the dynamic changes of internal and external factors before and after inter-generational transmission.After which,hypotheses about the influence of Family Business' s Inter-generational Inheritance on Charitable Donation are proposed.Using the data of annual charitable donations of public listed family companies from 2009 to 2016,this article uses the DID(doubledifferential analysis)to explore the influence of inter-generational inheritance on corporate donation scale.Further,we study the influence mechanism of heir legitimacy on the the charity donation scale.The results show that:(1)There is a positive correlation between the inter-generational inheritance of the family business and the charitable donation scale;(2)The legitimacy of heirs and family business charitable donation is negative correlated,the lower legitimacy of successor,the larger the charitable donation scale after inheritance;(3)The negative relationship between inter-generational inheritance and corporate financial performance is mitigated by charitable donation.