The Impact Of Corporate Charitable Donations On Corporate Financing Constraint

In recent years,investors have begun to pay more attention to and discuss corporate social responsibility behaviors.Dealing with the relationship between the daily business activities of the company and the performance of corporate social responsibility so that the performance of social responsibility can effectively promote the development of corporate business is among issues worth considering for enterprises.In the development process of enterprises,enterprises must always pay attention to the financing status of enterprises,especially in the epidemic situation,the integrity of the capital chain plays an unprecedented role in the survival of enterprises.However,as far as the current situation is concerned,Chinese enterprises generally have certain financing constraints.On the one hand,due to the continuous development of business,the company's capital needs are increasing,and on the other hand,due to the single financing channels of enterprises,enterprises are overly dependent on RMB loans.According to the strategic concept of corporate charitable donations,companies' active participation in charitable donations can bring social resources to the company,so it is usually regarded as one of the business strategies of the company.Based on this,this article studies the relationship between corporate charitable donations and corporate financing constraints.Based on this,this article studies the relationship between corporate charitable donations and corporate financing constraints.On the one hand,it enriches the motives of charitable donations,provides ways to alleviate financing constraints,and distinguishes the influence of different heterogeneous factors;on the other hand,it adopts propensity score matching method and instrumental variable method to supplement testing,reducing the impact of endogenous factors.Besides it supplements testing the mechanism of charitable donations which is conducive to the integrity of the logical chain.In view of the limitations of the author's academic level,this article has the following deficiencies: 1)Data on charitable donations excluding sponsorship and other expenses cannot be obtained in the data acquisition;2)Small and medium non-listed companies with more serious financing constraints cannot be included in the selection sample 3)In the process of discussion,it is impossible to quantify the information transmission and government relations and other mechanisms;4)When constructing the propensity score,it is impossible to include all the factors that affect charitable donations.Future scholars can conduct follow-up research on this basis.This article uses Shanghai and Shenzhen A-share listed companies(excluding the financial industry)as the research sample,selects financial data of the past ten years(2010-2019),and uses a combination of literature analysis and empirical analysis.In terms of documentation: This article first sorts out the definition,motives and influencing factors of corporate charitable donations,and makes it clear that the research in this article belongs to the category of strategic motives and political motives.At the same time,by studying the main influencing factors of charitable donations,prepare for the use of propensity score matching method to construct propensity scores below.Secondly,this article sorts out the definitions,measurement indicators,and influencing factors of financing constraints,selects appropriate indicators from different indicator systems to construct a measurement index,and prepares for empirical modeling by studying internal and external influencing factors.Finally,through the review of the influence mechanism,adjustment effect and intermediary channels of charitable donations on financing constraints,the research content of this article and the direction of further expansion are introduced,and the literature foundation is provided for the hypothesis.Theoretical foundation: Through combing the three theories of information asymmetry theory,signal transmission theory and resource dependence theory,this paper summarizes and analyzes the mechanism of corporate charitable donations on financing constraints based on the above theories,and proposes corresponding hypotheses.Empirical regression analysis: This article first discusses the net effect of charitable donations on financing constraints.Taking into account the impact of endogenousness,this article uses propensity score matching method to supplement the test.Finally,the measurement of financing constraints and the endogenous issues are separately robust test.At the same time,on this basis,the scale,ownership,and location are distinguished,and the differences in the mitigation effects of financing constraints of the three are studied.The method is to regress by adding the interaction term to the net effect model,observe the coefficient of the interaction term,and perform a group regression supplementary test.Finally,this article studies the intermediary channels of the mitigation utility of charitable donations,using the intermediary effect model,which is mainly divided into three steps,1)the regression of the equation without the intermediary variable,2)the test of the influence of the explanatory variable on the intermediary variable,and 3)the regression of the equation after the intermediary variable is added.Compare the significance and changes of the coefficients to explore the channels of charitable donations.The results of this paper show that:(1)Our country's listed company charitable donations have a mitigating effect on financing constraints,that is,listed companies participate in public charitable donation activities,through obtaining tax incentives,transmitting financial and reputation signals,and establishing relationships with stakeholders(including the government)contact and other methods.(2)Charitable donations have more obvious mitigation effects on the financing constraints of smaller,private,and listed companies in developed regions.Studies have shown that SMEs have low information transparency due to their short establishment time and small scale.They need the advertising effect of charitable donations to transmit high-quality signals and broaden financing channels;private enterprises are at an obvious disadvantage in the bank credit market and cannot compete with state-owned enterprises so they are subject to greater financing constraints.It is more necessary for them to transmit highquality signals through a way,so the mitigation effect is better.Developed regions often have a sound financial ecological environment,higher corporate credit levels,and smoother financial information.The quality of investors is better,so the signal transmission is smooth,so it can better play the signal transmission function of charitable donations.(3)The reason why corporate charitable donations can alleviate the level of corporate financing constraints is mainly through commercial credit,and the level of bank credit does not significantly help.Corporate charitable donations help non-state-owned listed companies obtain more commercial credit to bail out.Finally,this article puts forward relevant suggestions to both the enterprise and the government: On the enterprise side: 1)Enterprises can appropriately and rationally conduct high-profile public good deeds,which not only benefit the country and the people,but also help their long-term development,and strive to achieve economic and social benefits A win-win situation;2)Charitable donations should be regarded as an important part of corporate development in corporate strategy,and donations should be rationally planned and coordinated to build a long-term donation mechanism and system.3)Enterprises should strive to improve the quality of corporate charitable donation information disclosure,establish a standardized financial disclosure system internally,and introduce external supervision mechanisms to ensure that corporate charitable donations can truly alleviate financing constraints.On the government side:1)The government should promote financial market reforms,optimize market resource allocation,establish a mutually beneficial financing platform,and form a joint effort with companies to solve financing constraints;2)Relevant government departments should guide and increase companies' participation in charitable donations and social construction;it is necessary to ensure the reasonable flow of donation resources,strictly review and supervise,prevent corruption and waste,and ensure that corporate charitable donations can achieve maximum effectiveness.