Political Motivation And Listed Company Behaviour Of Corporate Social Responsibility

Corporate Social Responsibility(CSR) has become hot topic that concerned by public, governments and corporations and even rise to the degree of constructing Harmonious Society and sustainable development with the development of China's economic and social in recent years. Especially in 2008, snowstorm and subsequent WenChuan Earthquake, which like blindly catalyst, accelerate the development process of CSR in China.Charity donation, as an effective way to enforce Corporate social responsibility, is the focus of this paper. Then what factors determine whether the listed companies to donation and how much to donate in the Wenchuan Earthquakes. What factors lead to different ways in donate information disclosure, and the difference ways will bring with what economic consequences, and what investors and other stakeholders will react to this? The answer to these questions will not only help us to understand the behavior mechanism of CSR, but also help to the further development of CSR in the future.In chapter 2, we review the literature of political relations and social responsibility. We find that political relation is an alternative mechanism for absence of formal institution and a rational response to adverse backgrounds of inadequate protection of property rights. The concept and extension of CSR is also evolving with the development of social and economic, economy is a major character of companies, but the sociality hidden in the economy is the root of CSR. Therefore, we should not ignore other non-economic factors such as social, cultural, ethical etc. when study the issue of CSR.About social responsibility information disclosure, our study find the behavior of corporate management in deciding whether to disclose and what to disclose, in what manner and how to organize language, imply the strategic choice and motivation. The information disclosure strategic is not only influenced by the characteristics of corporate governance, company size, debt level, profitability, but also by macro environment background such as economic development, political environment and cultural etc. and the donation behavior of listed companies in Wenchuan Earthquakes is no longer for purely altruistic motives, but contain political motivation for seeking government relations in the context of Transition Economy.In chapter 3, we analyze the paper's theoretical base and institutional backgrounds. At first, we theoretically demonstrated such factors as property rights of listed companies and eligible for listing are all reflect the relationship between enterprise and government by analyzing the living condition of private economy in the context of special transition economies of China and the background of China's securities markets and securities issued institution. Then we analyze the necessity of political relation as an alternative mechanism for absence of formal institution. Finally, we study the functions of charitable donations. We find donation ideas and donation behavior also showed phase characteristics with the change in the donation awareness. Although altruistic motives (or ethical motivation), economy motives as well as win-win motives which combining charitable and corporate strategy are the common in domestic and foreign enterprises, political motives is unique to countries with economies transition. Charity. donation was given a special meaning in the context of special transition economies of China. It not only can alleviate social polarization at macro level, but help corporation to establish political relations and access to social recognition at the micro level.In chapter 4, we focused on the political motives hidden in the acts of corporate donation. Corporate Social Responsibility and the expansion of stakeholder theory constitute the theoretical base of charity donations. Then we discussed the development of donation in Western countries and find the difference in donation amount, donation area, donation motivation and the allocation of donations, but this difference mainly stem from the special background of transition economies. Lack of mature charitable culture constraints the cultivation of donate ideas and make donate behavior of Chinese enterprises shows a unique political motivation.In the part of empirical test, based on the donation data announced by listed companies in the 2008's Wenchuan Earthquakes, we demonstrated the political motivation hidden in the donation behavior of listed companies through concerning the key variables of property rights and public life. Our detailed conclusion is that the donate enthusiasm is higher in the private corporations and the later the company listed on, the higher enthusiasm during the Wenchuan Earthquakes.Through further analysis, we believe that the influence comes from regional differences in property rights protection and contract enforcement. Private property rights are not properly protected in the region where there has higher degree of government intervention and weak contract enforcement, as an alternative mechanism, private entrepreneurs are more willing to seek political relations through public donations in order to get governments'protection. The political motive is a substitute for poor protection of property rights during China's economic transformation period.In chapter 5, we demonstrated the political motivation hidden in the act of information disclosure. The widespread agency problem exist in modern business is the theoretical basis of information disclosure, Accountability concept, Legitimacy Theory and Social Contract etc are the theoretical basis of unique social responsibility information disclosure. Then we analyze the status of CSR Information Disclosure, especially based on the example of listed companies in Wenchuan Earthquakes, to explore the political motivation hidden in the disclosure act according to the difference in information disclosure time and disclosure ways.Then, we analyze factors which impact information disclosure of listed company and demonstrate the political motives behind the act from the perspective of empiric test. Our study show that donate amount influence significantly disclosure behavior.In general, the greater the amount of donations, the corporate selected more active ways to disclose donate information. And the political relationship influence the choice of means how to disclose. The weaker political relationship,the more active corporate prone to disclose. So we can conclude that disclosure act of listed company contains the political motive.Lastly, we analyze the donating background of Rizhao steel who famous for the huge mount donation in Wenchuan Earthquakes. Rizhao steel face the threat of annexation by state-owned enterprises and wish to arouse attention of the public and the media through huge amount donation. And Rizhao steel select a special way to disclose its donation information, it donate through CCTV major fundraising party which convey donation information more actively and timely. The acts of Rizhao steel show that private enterprises tend to charity donation as a way winning social recognition and carrying out public relations with government when property rights are not properly protected.In chapter 6, we analyzed the recognition based on the perspective of stakeholders on CSR. Governments, as one of major stakeholders,expresses its recognition on social responsibility behavior through introducting a series of policies on CSR, listed companies, as the main body of capital market, expresses its recognition by publishing the Social Responsibility Report, Investors, based on the idea of Socially Responsible Investing, expresses its recognition by buying the stock of corporations who actively fulfill their CSR. Consumers, as the seller's absolute authority "God", createt the myth of Wong Lo Kat out of stock in supermarket and express their strong support for social responsibility. Finally, the public, as the uncertainty majority, expresses their recognition by imposing pressure on company's irresponsible behavior through networks, medias, public opinion and other tangible and intangible medium.Then according to Efficient Market theory and Signaling theory, based on "donation notice" information released by listed firms, from the perspectives of investors in China capital market, we test whether investors agree with donation acts of listed company in Wenchuan Earthquakes. The result show that investors recognized donation behavior in the earthquake on the whole, but the degree of this recognition is influenced by nature of property rights, and this difference mainly stem from government intervention. In the region where there has higher degree of government intervention and weak law enforcement, private property rights are not properly protected, so private entrepreneurs are more willing to seek political connection as an alternative mechanism, and political motivation hidden in the donating behavior impact the recognition degree of investors.All in all, our study shows charitable donations is not only an abstract moral problems, but have complicated background of social, economic, culture and even political etc. In China, because of the imperfection of economic system and imbalance in regional development of property rights protection and contract implementation, charitable donations even as a means of seeking political relations by corporation. The main innovation of this study is:At first, based on political motivation, our research focuses on the influence of ownership nature, which as a special factor in corporate governance with Chinese characteristics, on donating behavior of listed company in the unique institutional environment of China's economic. We demonstrate the necessity of political relations as an alternative mechanisms in special institutional background of China's Transition Economy, and Participating in donation is a realistic way for entrepreneurs seeking government relations. At last, we demonstrate the political motivation in logical which behind in the donation behavior of private enterprises and make the study practical significance.Secondly, our study enrich the literature of political relations about private enterprise in terms of research contents. Our study shows that charity donation is a realistic way for private enterprises establishing political connection in China, and political connection is a rational response to adverse institutional environment in context of Transition Economies. Our study also expand the literature of CSR. Based on the charitable donation theory, we systemly study the donation behavior and subsequently disclosure behavior in donation information and recognition of stakeholders in the background of the Wenchuan Earthquakes.