Internationalization And Risk Management:Evidence Form Corporate Philanthropy

In the context of global economic integration,international operations have become an inevitable trend for the development and growth of enterprises.In line with the development trend of the times,the Chinese Communist Party formally proposed a "go global" strategy at the "17th National Congress of the Communist Party of China".Since then,more and more Chinese enterprises have begun to go abroad and actively explore the international market.In particular,the "Belt and Road" initiative proposed by General Secretary Xi Jinping in 2013 has further promoted the development of Chinese enterprises.According to the data of the "China Outbound Investment Development Report 2018" by the Ministry of Commerce,as of the end of 2017,a total of 25,500 domestic investors in China had established 39,200 foreign direct investment companies abroad,distributed in 189 countries or regions worldwide The total assets of overseas enterprises amounted to US $ 6 trillion,and the stock of foreign direct investment reached US $ 18.904 billion.Implementing the "going global" strategy will help Chinese companies learn from advanced foreign production,sales,and management experiences,adjust their structure and allocate resources in a wider range,and then enhance their competitiveness.However,the internationalization process of enterprises is not smooth and may face multiple challenges.In the process of international operation,the market that enterprises face has expanded from a single domestic market to a diversified international market.Enterprises will face multiple challenges such as political risks,institutional risks,exchange rate risks,and cultural differences.Whether it was the TCL merger and acquisition of French Thomson in the earlier years,or the recent series of sanctions by the US government against Huawei,it has shown that the process of internationalization of enterprises is fraught with various risks and brought a lot of operational uncertainty Sex.Therefore,in an increasingly complex international environment,how to avoid various risks in overseas investment and improve the stability and efficiency of business activities through reasonable means has become the key to promoting the transnational development of enterprises and implementing the "go global" strategy.Corporate social responsibility theory requires that enterprises not only create profits and assume legal responsibility to shareholders,but also bear responsibility to stakeholders such as consumers,society and the environment.A large amount of literature shows that enterprises' active social responsibility will help them obtain reputational capital and establish a good relationship with the government,which will bring certain “convenience” to their business activities.Charitable donation,as one of the oldest ways of fulfilling social responsibility,is widely used in many countries,and it is the main form of corporate social responsibility.Corporate charitable donations can create huge reputational capital for companies,and this kind of reputational capital can help companies obtain external financing and thus increase corporate value.In addition,charitable donations are a marketing strategy for companies.Through charitable donations,companies can increase their exposure and play the role of advertising marketing.In recent years,the escalation of international trade protectionism and the deterioration of the international business environment have made it difficult for Chinese companies to develop international business.Can Chinese companies use charitable donations to avoid overseas business risks,enhance business stability,and improve multinational business performance? It has become a theoretical and practical problem that needs to be studied and solved urgently.Therefore,this article takes the transnational operation and charitable donation behavior of Chinese enterprises as the research object,and conducts an empirical study on non-financial A-share listed companies from 2001 to 2017 through a multiple regression analysis method.And further study whether this effect differs among companies with different nature of corporate ownership,different innovation capabilities,and different redundant funds.In addition,this article explores whether charitable donations by multinational operating companies can indeed reduce their business risks.First,this paper puts forward its own research hypotheses on the basis of combing the existing literature;in addition,the data is analyzed by empirical testing methods;finally,the research conclusions are drawn.The research in this paper finds that the international operation of the enterprise can indeed promote the charitable donation of the company,and the amount of charitable donations in the companies with large international operations is also large.This is mainly because the charitable donation of enterprises can alleviate the risks of enterprises in the process of international operations.The impact of internationalization on charitable donations varies with the nature of the company,its innovation capabilities,and its redundant funding.This shows that when the company's internal resources are rich,it has the ability to solve business risks,and therefore it is less dependent on charitable donations.Examination of the economic consequences found that the charitable donation of multinational operating companies did reduce the business risks of the enterprises and increased the value of the enterprises.