Research On Charity Donation Of Loss-making Enterprise And Its Capital Market Reaction

Charitable donation is an important part of the company's performance of social responsibilities.It has now become a hot topic of research in China.In recent years,there has been a special phenomenon in corporate charitable donations,and a certain percentage of donations have also occurred in some companies with net profit losses.The final goal of enterprise is to maximize profits.However,enterprises' participation in charitable donations means that they will increase the operating costs of enterprises.The contradiction between cost and profit points out that The loss-making enterprises should not behave as charitable donations.Therefore,the issue of donation by loss-making enterprises is worth paying attention.How can a loss-making company make charitable donations without a reasonable guarantee of profits.What kinds of economic consequences will bring to the company.This paper uses the unique perspective of the charity donation in the loss-making enterprises and adopts the combination of the status quo carding and the case study to study the charitable donation behavior in the loss-making enterprises.Combining with the existing literature and related theoretical basis,the paper analyzes the characteristics of the loss-making enterprises involved in charitable donations from various aspects,and studies the charitable donations and economic consequences of case enterprises.Event analysis method is used to analyze the external publication of the company's charitable donation information can obtain a positive market effect in a short period of time.The research of this paper reflects the importance of charitable donation to the operation of the company.As an important strategic decision for a company,it is closely related to the characteristics of the company itself and the objectiveenvironment in which it is located.At the same time,its research conclusions have deepened the understanding of the charity donations and economic consequences of loss-making enterprises,and provided reference and inspiration for the decision-making of loss-making enterprises.