Research On The Impact Of Short Selling Mechanism On Charitable Donations Of Chinese Listed Companies ——Based On The Quasi-Natural Experiment Of Margin Trading System

Charitable donations are an important way for companies to fulfill their social responsibilities,and it is also an important way to play the role of the third distribution.It is conducive to the shift of resources to groups with limited resources and is an important way to achieve common prosperity.According to the "Report on China's Charitable Donations",the main source of China's charitable donations is enterprises,with donations accounting for more than 60% of the total,contributing an important force to the development of my country's philanthropy,and also demonstrating the responsibility and mission of Chinese enterprises to actively undertake social responsibilities.Although charitable donations can help narrow the gap between the rich and the poor and maintain social stability,for companies,this behavior will significantly reduce corporate profits,which goes against the business goal of maximizing profits.That being the case,why do companies need to make charitable donations? Many scholars have found that there are certain economic motivations for corporate charitable donations.Specifically,charitable donations can strengthen the relationship between the company and the government to obtain financing convenience;increase the company's profits by obtaining reputation and other resources;and transmit the company's good signals and other economic benefits.This also means that a series of external environmental changes that affect the economic benefits of corporate charitable donations will further affect corporate charitable donations.At present,on the road to common prosperity in China,charitable donations are endowed with deeper economic connotation and social significance.In this context,analyzing the impact of the external institutional environment on corporate charitable donations from different perspectives is useful for identifying and guiding corporate philanthropy.The act of donating and helping to prosper together has important practical significance.As an important reform of the capital market,the introduction of the short-selling mechanism has put an end to the long-term “unilateral market” phenomenon in the domestic A-share market,has brought short-selling threats to enterprises,and has affected many corporate decisions.So,charitable donation is an important strategic decision of enterprises.Whether the introduction of a short-selling mechanism will affect the strategic charitable donation activities of enterprises has not been studied in the literature.Based on this,this article uses the external event of China's launch of the margin trading system and uses the double differential model to examine the impact of the short-selling mechanism on corporate donations.The study found that after the launch of the short-selling mechanism,the donation level of enterprises has increased significantly,and the results are still valid after a series of robustness tests.This shows that enterprises use charitable donations as a tool to alleviate the pressure of short-selling.In addition,the effect of relaxing short-selling controls on corporate charitable donations is more significant in the western regions of the country and regions with a low degree of marketization.This article further analyzes the economic motivations of companies' charitable donations,and finds that companies' charitable donations have two motivations: political rent-seeking and signal transmission.Donations have stronger incentives to strengthen government-enterprise relations to alleviate the pressure of short-selling.When stock prices face greater downward pressure,companies have stronger incentives to use charitable donations to signal to boost stock prices.Further research in this paper finds that companies with higher agency costs,lower levels of internal governance,and lower shareholder oversight have a more significant effect of relaxing short-selling controls on their donation levels.Finally,based on the results of the empirical test,a research summary is made on the full text,and the following policy recommendations are put forward: one is to improve the margin financing and securities lending system to force enterprises to fulfill their social responsibilities;the other is to improve corporate governance and suppress management's opportunism;Be wary of corporate "hypocritical" marketing.The research conclusions of this article are of great significance for us to accurately understand the charitable donation behavior of enterprises,to identify the relationship between the capital market and corporate charitable donations,and to use the capital market to guide corporate charitable donations.