Chairman’s Party Membership,Targeted Poverty Alleviation And Its Economic Consequences

It is one of the three major battles set forth at the 19 th national congress of the communist party of China(CPC).At present,the fight against poverty is at a critical stage.It is less than one year before the end of 2020.All sectors of the country are making concerted efforts.The CSRC and other departments have introduced a series of measures to encourage listed companies to actively participate in targeted poverty alleviation.The high echelon theory holds that the demographic characteristics of senior executives,such as gender,age and education level,can reflect the differences in their cognitive structure and values,thus influencing the company’s operating decisions.Party membership is another important identity characteristic of senior executives.However,at present,researches on party membership and social responsibility of senior executives mainly focus on charitable donation.Some studies have found that the political participation of private entrepreneurs has a significant positive impact on corporate charitable donation.To some extent,this shows that the background of party membership of entrepreneurs is conducive to promoting their sense of social responsibility.Targeted poverty alleviation is a major institutional innovation in the field of poverty alleviation in China.It is different from the previous "giving people fish" charitable donation,and it is a market-oriented way of "giving people fishing".It is a tough test for the national government to solve the poverty problem even in countries with fairly developed welfare systems.Then,for listed companies,whether they will participate in targeted poverty alleviation after receiving the central government’s call to win the battle against poverty? In addition,whether participating in targeted poverty alleviation can bring benefits such as performance improvement,financing convenience and government subsidies to enterprises like previous charitable donations.Under the premise that all economic consequences are unknown,the chairman is the person in the enterprise who has the important right to speak.The party chairman pursue "ideological interests" and respond to national ideological mobilization,and they are also faced with a reputational restriction mechanism.Will it affect the company to make accurate poverty alleviation decisions? What are the economic consequences of participating in targeted poverty alleviation?Taking Shanghai and Shenzhen A-share listed companies from 2016 to 2018 as research samples,the empirical study investigates the influence of chairman’s party membership on the fulfillment of social responsibility for targeted poverty alleviation,and explores the economic consequences of participating in targeted poverty alleviation from the perspectives of capital cost and government subsidy.The empirical study finds that :(1)the chairman of the board of directors with party members as to the identity of the company more proactive participation accurately for poverty alleviation and degree is higher.After considering the regional marketing process,we found that the marketization process does not affect the play of the role of party membership.Dividing the samples according to the nature of the ownership of the study,the results show that the chairman of the party membership to the enterprise accurate behavior and the influence of investment amount for poverty alleviation in state-owned enterprises and non-state-owned enterprises were significantly positive;(2)further studies on enterprises participate in the precise impact on the cost of capital for poverty alleviation,the empirical results show that the enterprise to perform accurate poverty alleviation social responsibility significantly reduced the weighted average cost of capital,and the more accurate investment amount for poverty alleviation,the greater the extent of the weighted average cost of capital of enterprise,this relationship is not affected by the level of marketization,and were significantly exist in the state-owned enterprises and non-state-owned enterprises;(3)compared to was not involved in precision of enterprise for poverty alleviation,participate in the more precise enterprise obtain the government subsidies for poverty alleviation,and the higher the input line,the more conducive to enterprise to obtain the government subsidies.Grouping samples test results show that the region a high degree of marketization,the nature of the state-owned property right,two factors that are significantly better enterprises accurately to the positive effect of government subsidy for poverty alleviation.The above conclusions are still valid after a series of robustness tests.This article not only expands the scope of social responsibility research from the perspective of precision poverty alleviation,but also enriches the research on the influencing factors of precision poverty alleviation from the aspect of the chairman’s party membership.The conclusions of this article provide empirical evidence for the government to accelerate the marketization process and encourage listed companies to participate in precision poverty alleviation.It also provides new ideas for enterprises to cultivate "red funds",play the role of party members as pioneers,and engage in targeted poverty alleviation,thereby reducing capital costs,obtaining government subsidies and achieving better development.