Study On The Impact Of Corporate Charitable Giving On The Stock Liquidity

At the present stage,China is committed to exploring the modernisation path to achieve common prosperity,and the "construction of a basic institutional arrangement for the coordination of primary,redistribution and tertiary distribution" is an important strategic plan made by the Party and the State in response to China’s national conditions.As an important support for the third distribution,the development of charitable giving and other public welfare undertakings is now given a deeper economic connotation and social significance,and is playing an increasingly important role in helping China to redistribute social wealth,promote social progress,and foster equitable development and social harmony.At the same time,among the many subjects of charitable giving,enterprises as an important part have also become the focus of attention from all walks of life.As the truth,in few years,with the development of the spiritual civilisation of society and the values of the residents,the fulfilment of social responsibility has gradually become a basic requirement for Chinese enterprises from various stakeholders.In April 2016,in his "Speech at the Symposium on Network Security and Informatization",General Secretary Xi Jinping also stressed that "only enterprises that actively assume social responsibility are the most competitive and viable ones".For this reason,as a vital manifestation of social responsibility,corporate philanthropic endowment has also grown rapidly and become an important force for social good.In this context,many scholars have found that charitable giving not only plays an important role in the redistribution of social wealth at the macro level,but also has an impact on micro enterprises themselves,and have analysed the economic effects of corporate charitable giving based on different perspectives,among which the relationship between charitable giving and the capital market has also been the focus of academics’ attention.Nevertheless,it is worth stating that no scholar has yet analysed whether and how the mechanisms of stock liquidity,a core element of the financial sector and the lifeblood of capital markets,can be influenced by corporate charitable giving behaviour.Based on this,this paper analyses the relationship between corporate philanthropic giving and stock liquidity using data on Chinese listed companies,adding new evidence to the study of the capital market performance of corporate philanthropic giving.Based on the above analysis,this paper compares the theories and literature related to corporate charitable giving and equity liquidity,and selects the data on Chinese A-share listed companies from 2008 to 2020 as the study swatch,and uses panel data,the relationship between the two was empirically analyzed by a double fixed-effect model.The findings of the research show that:(1)Corporate charitable donations have a strong amplifying effect on equity liquidity.The paper uses an instrumental variables approach to eliminate possible endogeneity issues,and the above findings still hold by replacing variables and excluding particular years for robustness testing;(2)In terms of mechanisms of action,this paper finds that corporate philanthropic giving can act on corporate stock liquidity through three mechanisms: Alleviating financing constraints,enhancing corporate value and product market performance;(3)The heterogeneity analysis found that the effect of corporate charitable giving on stock liquidity was relatively stronger for non-state owned enterprises,higher levels of performance and lower shares held by institutional investors;(4)Further empirical analysis of the moderating effect found that: Media attention can enhance the contribution of corporate charitable giving to stock liquidity.Based on the above conclusions,this document makes proposals: Firstly,for enterprises,managers should face up to the positive impact of CSR fulfillment on the enterprise,elevate charitable giving to its strategic level,and focus on the link between charitable giving and stock liquidity to build a platform for sustainable business and good development of the capital market;Secondly,the government and other regulatory authorities need to further develop the relevant regulations and systems related to charitable giving,and play their macro-regulatory functions to promote enterprises’ understanding of the fulfillment of social responsibility from the market’s point of view,such as equity flows,so as to enhance the dynamism of the market economy and guide enterprises to make spontaneous donations;Thirdly,for investors,they should properly understand the impact of corporate charitable giving information on stock liquidity and make rational investment decisions with reference to the behaviour of the media.