Research On The Motivation And Effect Of Corporate Charitable Donation In China

With the continuous development of China’s economy,the demand for philanthropy in society has also been increasing.In order to promote the development of philanthropy in China,the Charity Law of the People’s Republic of China was officially implemented on September 1,2016.By 2019,more than 60% of the social subjects participating in donations in China will be enterprises,and charitable donations will lead to the outflow of cash and cash equivalents of enterprises,which is obviously not in line with the goal of pursuing profits by enterprises.Therefore,it is necessary to study the motivation and effect of corporate charitable donations.This paper mainly focuses on the motivation of charitable donations of Chinese enterprises and the effects it brings to enterprises.Firstly,based on the theory of social responsibility and reputation,the existing literature related to corporate charitable donations is sorted out.Secondly,through descriptive statistics,the overview of charitable donations of listed enterprises in China is displayed.Thirdly,taking Mengniu Dairy as an example,the case analysis method was used to explain in detail the situation and characteristics of Mengniu Dairy’s charitable donation,and the market effect of Mengniu Dairy’s charitable donation and the related effects of Mengniu Dairy’s charitable donation were analyzed by the incident research method.Finally,the shortcomings in Mengniu Dairy’s charitable donation are summarized and relevant suggestions are given,and the research conclusions are drawn.From the overall performance of listed companies in China,the scale and participation of charitable donations have a trend of increase,and there are also great differences between different enterprises.Enterprises with strong profitability and state-owned enterprises,especially enterprises in economically developed areas,have a large proportion of charitable donations;From the perspective of the case company Mengniu Dairy,its charitable donation not only achieves the purpose of assuming social responsibility and helping disadvantaged groups,but also improves the reputation of the enterprise;The statistical test found that Mengniu Dairy’s market excess cumulative rate of return during the announcement window of charitable donation was negative,which indicated that charitable donations could not immediately bring positive impact to enterprises.However,in the long run,charitable donations are conducive to enterprises obtaining tax incentives,expanding sales and profits,and reducing the cost of the industrial chain;In addition,charitable donations can help Mengniu Dairy enhance its social reputation,enhance corporate cohesion,and optimize its relationship with the government.Through the detailed dissection of Mengniu Dairy’s charitable donation,this paper understands the impact of charitable donation on enterprises,so as to provide reference for the development of philanthropy in China.