Research On The Effect Of Ownership Structure On The Charitable Donations

The development of enterprises causes numerous social issues in recent year. The companies which are the majority in the economy should contribute to social welfare. Charitable donation is a good to do that. In this paper, charitable donations are analyzed from the perspective of ownership structure. The ownership structure is a critical part in the enterprise management structure and it has a big impact on corporate business performance, strategic decision-making and supervision. Charitable donations as an important strategic business decisions, it will usually affected by various factors, this paper explore the impact of ownership structure on corporate giving behavior from the perspective of the ownership structure.To analyze the effect on charitable donation by shareholder structure(Ownership Concentration and Share Ratio of Largest Shareholder), the sample of Shanghai and Shenzhen A stock markets between2008and2010is analyzed on principal agent theory, cost theory and Institutional theory. The result follows.(1) Shareholder structure has significant negative impact on charitable donation. Since majority shareholder is willing to supervise the manager considering the wealth maximization, the donation cost reduces.(2) Advertising intensity regulate ownership concentration and charitable donation. With the increase of advertising intensity, ownership concentration has weaker impact on donation level. The majority shareholder may increase the donation cost, since the donation would gain the profit considering the react of the customer.(3) Market level regulate ownership concentration and charitable donation. With the increase of market level, ownership concentration has stronger impact on donation level. The reason may be that the enterprise voluntary to donate with the high market level, otherwise the enterprise has to donate considering the relationship between government and itself.This paper introduces the mechanism of the impact on donation level by shareholder structure and the difference in perspective on region and enterprise. It is significant to understand the impact on charitable donation.