The Impact Of Corporate Philanthropy On The Firm Value And Its Mechanisms

Corporate philanthropy plays an important role in the field of corporate research as it reflects the Corporate Social Responsibility(CSR).In recent years,academic research has become more mature and fruitful.However,many of these studies,both analytical and empirical,are based on perspectives of the motives or economic consequences of charitable donations.Empirical literature on charitable donation and firm value is rare and has not yet reached a unified result,let alone the mechanisms by which donation contribute to the value of the company.This paper examines the impact of corporate donations on corporate value and its mechanisms,which not only helps us understand the role of donations in corporate value,but also helps us examine the roles of government and market in driving corporate value.In this research,firstly ? choose corporate philanthropy a breakthrough point and use the data of Chinese listed companies from year 2008 to 2015 to analyse the impact of corporate philanthropy on corporate value.After then I try to figure out the mechanism of this kind of impact from two angles:the government and the market.Empirical results show that:(1)although charitable giving will produce financial pressure in the short-term,it can really enhance the value of the enterprise;this conclusion still holds after controlling the endogenous effects.(2)From the government angle,tax preference is a partial mechanism between charitable giving and the value of the company.From the market angel,the main business gross profit margin and cash flow are the mechanisms between charitable giving and the value of the company,and both of the two are partial intermediary effects.On this basis,I continue to analyze the potential moderators of the impact on corporate value through the macro fiscal,market and religious environments,and the behavior of firms under different characteristics.Results show that the degree of narketization and the religious atmosphere play an important role in adjusting the value of charitable giving effect,while the regulation of local fiscal transparency effect is not significant.The charitable donations of state-owned enterprises and non-state-owned enterprises are significant in improving the value of enterprises,but the first one are stronger in both the degree and the depth.Donation of profitable enterprise enhance its firm value better than that of the non-profit enterprise.And lastly,donation of consumer related companies show a stronger impact on the corporate value than the insensitive companies.This paper has certain practical guiding value.With corporate social responsibility gradually recognized by different social parties,charitable donation will undoubtedly become a "value weapon" to enhance corporate value.This paper shows that compared with the government mechanism,the market mechanism plays a more important role in the effect of corporate donation on firm value,which embodies the results of China's market economy construction.Meanwhile,we should make full use of the market mechanism to make corporate charitable donations become a social culture,thus encouraging enterprises to donate voluntarily and spontaneously.