Research On The Intertemporal Interactive Impact Between Corporate Donation And Financial Performance

Corporate donation is conducive to optimizing the third distribution and promoting common prosperity.The relationship between corporate donation and corporate financial performance(CFP)has been focused on by scholars,clarifying the exact relationship between the two will help corporate governance and philanthropy development.Existing studies mostly focus on the one-way impact of corporate donation on CFP,ignoring the possible interaction and delayed impact between the two.However,the relationship between the two is not necessarily a simple one-way impact.Good CFP is the prerequisite for corporate donation,and corporate donation affect the future CFP by influencing the decision-making of stakeholders.This article makes a theoretical and empirical analysis of the intertemporal interaction between the corporate donation and CFP.Based on Reputation Theory,Stakeholder Theory,Signaling Theory and Cost-Benefit Theory,using 2016—2020 data from 1,268 A-share listed companies in China as a sample,it verifies the intertemporal interaction between corporate donation and CFP.It further examines the influence of the nature of corporate property rights and consumer sensitivity on the relationship between corporate donation and CFP.The research results show that: Firstly,corporate donation and CFP has intertemporal interaction effect: The past CFP has a positive impact on current donation,and the current donation has a positive impact on future CFP.Secondly,the nature of property rights has a moderating effect:Compared with state-owned enterprises,the past CFP of private enterprises has a more significant impact on the current donation,and the current donation of private enterprises has a more significant impact on future CFP.Thirdly,consumer-sensitivity has a moderating effect:Compared with non-consumer-sensitive enterprises,the past CFP of consumer-sensitive enterprises has a more significant impact on current donation,and the current donation of consumer-sensitive enterprises has a more significant impact on future CFP.In addition,this article also conducts an extended analysis of the cycle of the intertemporal interaction impact of corporate donation and CFP.Research has found that the impact of corporate donation on future CFP does not always exist,and corporate donation will only have a significant positive impact on next year’s CFP.Corporate donation will not have a significant impact on the CFP of the second year in the future.Companies hoping to achieve sustainable growth in CFP through donations cannot rely on one-time donations but should continue to donate.To sum up,the relationship between corporate donation and CFP is mutually reinforcing and cyclically increasing.Based on this,this article puts forward some policy recommendations,such as: Improving the legal system for corporate donation,creating a good regulatory environment,and encouraging companies to actively participate in donations.This will not only help achieve a win-win situation for social welfare undertakings and business operations but will also help promote sustainable common prosperity.