Are Illegal Listed Companies More Willing To Make Charitable Donation?

Listed companies’illegal violations emerge endlessly in recent years. These violations have not only brought investors tremendous bad impacts but also made themselves immerse in credit crisis which has brought enterprises’financial and reputation great damage. At the same time, when serious natural disasters happened, listed corporations which donated actively showed great enthusiasm in the post-disaster relief work. Enterprises are now paying more and more attention to their own image of social responsibilities and more and more actively engage in charitable activities, which not only limit in natural disasters time. According to the Legitimacy Theory, we know that corporate philanthropy is used as "protection money" which can reduce the value losses caused by the harm or potential harm brought by the stakeholders. At the same time, the company donations can reduce the loss of the company’reputation caused by one’s illegal violations in a certain extent. Therefore, we want to study the relationship between companies’illegal violations and donations, and whether there is something different between different kinds of illegal violations. We also want to explore whether the enterprise scale and Return-on-Assets (ROA) moderate the relationship.We divide this thesis into six chapters. Firstly we introduce the research background, research framework and so on. What followed is literature review about listed companies’ illegal violations and CSR. In Chapter3, we present the process of hypothesis reasoning in theory. Chapter4describes how we can get the date and how to process it. In Chapter5, we tested the entire hypothesizes. Data analysis showed that:(1) there isn’t significant correlation between enterprise illegal and enterprise donation initiative, neither between enterprise illegal and enterprise donation amount. However, significant negative correlation exit in enterprise accounting management level; significant positive correlation exit in executives irregularities level.(2) Enterprise scale doesn’t moderate the relationship between enterprise illegal and enterprise donation initiative and it doesn’t moderate the relationship between enterprise illegal and donation amount either. But it moderates the relationship between accounting management level illegal and enterprise donation initiative. It also moderates the relationship between executives’irregularities and enterprise donation initiative.(3) The regulation effect of return on assets is not significant. Chapter6expounded the theoretical and practical contribution, as well as the research limitations and future study directions.