A Study On The Private Donations Of Chinese Listed Companies

For rational and profit seeking enterprises,why should they transfer resources to the outside world for free and use them for non-profit charitable donations?Existing research focuses more on interpreting corporate charitable donation decisions from the perspective of corporate strategy and public welfare behavior.However,the specific decisions of charitable donations are not made by the company as a whole,but rather through the agency mechanism and the internal hierarchical system of the company,ultimately made and implemented by the major shareholders and management with decision-making power,This makes corporate charitable donations more often have the attribute of individual willingness expressed through organizational behavior,becoming a result of mixing the individual wishes and demands of "insiders".Corporate charitable donations often have a dual motivation of implementing organizational strategies and pursuing individual interests,which has been confirmed in many literature.However,existing research has not been able to effectively separate strategic motivation from self-interest motivation,thus neglecting to some extent the impact of the self-interest motivation of corporate controllers on corporate donation decisions.For this reason,this article attempts to view corporate charitable donations as a decision result of the joint action of strategic and self-interest motives.By quantitatively decomposing and stripping the components of strategic and private donations in corporate charitable donations,a complete and analytical framework is established for the heterogeneous motives of corporate charitable donations,which are "strategic motives affect strategic donations,and self-interest motives lead to private donations",Furthermore,it is demonstrated that the agent’s selfish motivation has an inherent impact mechanism and practical role on the strategic and private donation decisions of enterprises.Firstly,this article attempts to effectively peel off the different motivational components of charitable donations by listed companies in an empirical dimension by defining the concept of private donations.However,considering that existing research has achieved the optimal scale of charitable donations based on the constraint of corporate affordability and quantitative measurement of excessive donations,there is a lack of attention to the impact of corporate instrumental motivation and the characteristic of agglomeration of donation scales to regions caused by competition in corporate charitable donations,Therefore,it may seriously overestimate the degree of private donations by enterprises.Therefore,this article introduces the concept of charity competition between enterprises,and believes that the existence of charity competition between enterprises makes the actual charitable donation decisions of enterprises related to the level of other enterprises’ charitable donations,and presents a clustering towards regional scales.Based on this understanding,this article introduces the concept of charity competition into the analysis of corporate charitable donation decisions by demonstrating and measuring regional competition scales.The analysis found that in a charitable competition framework,"more competition,more donation" only exists in the sample of competitive winners or companies with optimistic expectations.For those who fail in competition or companies with pessimistic expectations,when donations are no longer profitable,companies will shrink their donation model and turn to "donation negativity",which confirms the characteristics of donation conglomeration effect and agglomeration of donation scales to regions due to charitable competition.At the same time,in the quantitative framework of decomposing the motivation of charitable donations based on the financial affordability of enterprises,this article introduces the factor of agglomeration of corporate charitable donations to regional competition scales,and effectively controls the impact of corporate instrumental motivation on the optimal charitable donation scale of enterprises.Based on this,this article decomposes the different components of charitable donations driven by corporate strategic motivation and self-interest motivation,Quantitative observation of private donations by enterprises has been achieved.At the same time,in order to further provide reasonable evidence for the decomposition of strategic donations and private donations based on different motives,this article examines the relationship between different charitable donation components and the future value realization and long-term performance of enterprises.The conclusion confirms that the private donation behavior implemented by corporate controllers based on private motives is indeed significantly negatively related to the future performance of enterprises,As an action implemented by enterprises for specific strategic goals,strategic donations can promote the growth of enterprise value and also enhance the performance of enterprises in the next two and three years.This provides support for the rationality of decomposing corporate charitable donations in this article.Secondly,under the theoretical structure of dual agency conflicts in enterprises,this article analyzes the impact of major shareholder agency conflicts on private donations by enterprises.The conclusion indicates that within the equity system of listed companies,the higher the shareholding ratio of the controlling shareholder ranking first,the more private donations the company has,indicating that there is a "more tunneling effect" of major shareholders within the decision-making structure of the listed company.The degree of marketization in the region where the listed company is located will negatively regulate the positive correlation between the shareholding ratio of major shareholders and private donations of the enterprise.On the inhibitory path,the introduction of institutional investors can effectively suppress private charitable donations by listed companies.The higher the shareholding ratio of institutional investors,the smaller the amount of private charitable donations by the enterprise.At the same time,the establishment of an independent director system can also effectively suppress major shareholders from manipulating listed companies for selfish donations due to selfish motives.Furthermore,this article analyzes the impact of manager agency conflicts on private donations by enterprises.The conclusion confirms that the increase in management power amplifies the private coercion of managers in the charitable donation process,and charitable donations become a utilitarian tool for managers to seek social reputation and relationship networks,which also leads to a serious deviation from the rational level of actual charitable donations by enterprises.The degree of marketization in the region where the listed company is located will negatively regulate the role of management power in private donations to the enterprise.At the same time,the introduction of institutional investors can effectively suppress private donations by enterprises.The higher the shareholding ratio of institutional investors,the smaller the amount of private donations by enterprises.The establishment of an independent director system can also effectively suppress major shareholders from manipulating listed companies for private donations due to selfish motives.The higher the proportion of independent directors in the board of directors,the smaller the amount of private donations made by the enterprise.Finally,this article notes that the "public welfare" cloak of corporate private donations can make it easier for corporate controllers to conceal their actions and may also receive stronger reputation signal incentives.Therefore,this article analyzes the impact of informal institutions represented by the infiltration of Confucian culture on corporate private donations.The conclusion indicates that there is a positive correlation between the infiltration intensity of Confucian culture in the registered location of listed companies and the level of private donations by enterprises.That is,the areas with a stronger Confucian culture atmosphere have a higher level of private donations by enterprises.The degree of marketization reversely regulates the impact of Confucian culture on corporate private donations.At the same time,the actual controllers of state-owned enterprises not only have stronger motives for selfish donations,but also have a more prominent role in the infiltration of Confucian culture,and the coefficient difference between groups is tested through Bootstrap.Furthermore,the correction effect of marketization on private donations by enterprises is only valid in the sample group of non-state-owned enterprises.The impact of marketization on the sample group of state-owned enterprises is no longer significant.At last,this article proposes relevant suggestions for the governance of corporate private donation behavior.The innovations of this article are as follows:Firstly,by decomposing the different motivational components of corporate charitable donations,establishing an organic connection between strategic motivation and selfish motivation,improving the dual motivation argumentation framework applicable to the analysis of charitable donation decisions of Chinese listed companies;Secondly,a dual agency conflict theoretical framework has been constructed for the analysis of charitable donations by Chinese listed companies;Thirdly,the concept of charitable competition is introduced into the decision-making analysis of corporate charitable donations,and incorporate the scale agglomeration effect of corporate donations caused by charitable competition into the decomposition of corporate private donations,thus achieving a more accurate and complete identification of the strategic donation components of enterprises.