Research On The Impact Of The Regional Corruption On Corporate Charitable Donations

At the closing ceremony of the National People's Congress in March 2016,the "People's Republic of China Charity Law(Draft)" was voted on.Through the law to actively guide and standardize the development of China's philanthropy,and make full use of valuable donation resources to the places that are really needed,it is of vital importance to the realization of policy objectives such as precision poverty alleviation and the creation of a well-off society.As an important participant in social production activities,enterprises,while occupying a large amount of public resources,also bear important social responsibilities such as stabilizing employment,stimulating local economic development,and assisting the government in resisting natural disasters.In the legislation,the company provides tax incentives for charitable donations,encourages enterprises to participate in charitable donations,and contributes to the rational redistribution of corporate wealth resources.In recent years,charitable donations from the Chinese business community have played an important role in social donations,regardless of the amount or influence.As one of the ways for enterprises to fulfill their social responsibilities,charitable donation cuts off the natural attributes of poverty alleviation and dedication,and the political motivation and economic consequences behind the donation behavior have been paid attention to by the academic circles.The existing literature on the motivation of corporate charity behavior mainly includes the following four points: altruistic motivation,strategic motivation,political and institutional power motivation,and management self-interest motivation.At the same time,a large number of studies based on resource idle theory or high ladder theory,analyzed and tested the factors behind the impact of corporate charitable donations,including asset size,business performance and financial status,as well as corporate governance structure,executive traits and Industry characteristics,etc.Although the research results are rich,the research paths of these motivations are mostly single,mainly based on the influence of the micro level of enterprises,and lack of analysis of the mechanism of action at the macro level.Therefore,this paper intends to explore corporate charitable donation behavior and its motives from a new perspective.First,in areas with high levels of official corruption,the government's administrative interventions on enterprises are often more serious.Enterprises may be “assessed by donations”.In order to avoid the uncertainty of policy,corporate charitable donations are a last resort.Secondly,due to China's special national conditions and resource allocation system,government officials have administrative approval power in the allocation of social resources,which plays a decisive role in the business activities of resource-dependent enterprises.Therefore,enterprises are more motivated to cater to the construction of officials during corruption.Political relations,and charitable donations are important channels for enterprises to protect property rights,establish political relations,and obtain scarce resources.Finally,corruption mostly occurs in areas where economic development is relatively backward and marketization is low.Local governments lack sufficient resources to invest in infrastructure construction.Enterprises may take the initiative to undertake local development in order to create a good business environment.Social responsibility,at the same time,can also attract outside attention through donations and improve product reputation.This paper selects all A-share listed companies from 2008 to 2017 as the research object,and comprehensively explores the relationship between regional corruption and charitable donations.The results of the study found that: First,the more serious the regional corruption,the more inclined the enterprises are to make charitable donations.In corrupt areas,corrupt officials are often more serious about corporate administrative interventions.To avoid external risks,companies will actively build political and business relationships through charitable donations.Second,considering the property rights of enterprises,private enterprises are more inclined to charitable donations than state-owned enterprises.This is because the special ownership of state-owned enterprises makes them have the inherent advantages of political relations,and they have the resource privileges granted by the state.Therefore,it is not necessary to deliberately build political relations through charitable donations like private enterprises.By obtaining the resources needed for business development,state-owned enterprises can better alleviate the adverse effects of the macro-political environment.Third,considering the type of enterprise products,the industry directly contacts products and consumers.The relationship between regional corruption and charitable donations is more significant,that is,enterprises are more inclined to attract more consumers through charitable donations.And in further analysis,it is found that the enterprises with political relations have a more positive relationship between regional corruption and charitable donations.Secondly,the political motive test under anti-corruption governance is compared with the eight-eighth “eight regulations”.The relationship between regional corruption and charitable donations before the promulgation was more significant;finally,in the economic consequences test,charitable donations helped to reduce the real tax rate of enterprises in high-corruption areas.The paper also made the following test of robustness: First,the scale of charitable donations is measured by the amount of donations compared to total assets,and the amount of donations compared to operating income.Second,the regional corruption environmental variables lag behind three periods,and the corporate charitable donation tendency is still significant,which also shows that the regional corruption environment has a long-term impact on the micro-financial behavior of enterprises.The results of the robustness test also support the previous conclusions.Based on the results of empirical tests,this paper proposes the following suggestions: first,promote market-oriented reforms and reduce government intervention;second,strengthen support for private enterprises at the policy and market levels,and promote state-owned enterprises and private enterprises in a fair market environment.To compete;third,improve the government's supervision and management functions,guide enterprises to actively participate in charitable causes,and reduce political donations.This paper mainly has the following three research contributions and innovations: First,the current research on charitable donations mainly focuses on behavioral motives and the influencing factors behind them,and most of the influencing factors are based on the governance structure or personal characteristics of executives.Majority links macroeconomic environmental factors with corporate micro-charitable donations.Secondly,so far,the research on the economic consequences of corruption mainly starts from the impact of corruption on the efficiency of public management,and explores the relationship between it and macroeconomic growth,but lacks the research on the impact of regional corruption on microfinance decision-making behavior of enterprises.Third,it enriches the influence path of charitable donation motivation,and provides policy reference for strengthening the government's supervision and management functions and guiding enterprises to carry out real unpaid charity.