| With the development of social civilization, the requirements of enterprises are no longer limited to the development of the profit, while the public expect that just like other citizens’enterprises should fulfill their responsibilities in all aspects. Charitable donations as the most direct and the most effective way in corporate social responsibilities has got rapid development in recent years, especially after the occurrence of a number of world shocked natural disasters, corporate charitable donations have been strengthened extravagantly, and become enterprises common behavior. In theory, corporate charitable donations can help enterprises to establish a positive image, and deliver a sense of responsibility and caring, and then enterprises can get the support of stakeholders for a better competitive environment. However, in reality, corporate charitable donations will inevitably occupy enterprises’ resources which can be used to create profit, thus this behavior goes against to the traditional theory of corporate management. So far business operators and investors may have questions about:Are their enterprises supposed to participate in charitable donations? And does this behavior improve the corporate financial performance or reduce it? A large number of domestic and foreign scholars have done researches on the relationship between charitable donations and corporate financial performance, but the conclusions are not consistent, the main conclusions include positive correlation, negative correlation and even no relation. Considering the development of enterprise is a dynamic process, and in different stages, the enterprise’s management status and financial status are all different. These differences can not only affect the enterprise’s ability to participate in charitable donations, but they will also affect the effect of charitable donations. Therefore, this thesis is going to do an empirical research on the relation between corporate charitable donations and corporate financial performance.Starting from the basic theories of corporate charitable donations, in this thesis, we look into the internal and external motivations of charitable donations and the mechanism of charity donations on corporate financial performance. After that, combining with the feature of enterprise management in different periods and their cash flow situations, we put forward four hypotheses about the impact of charitable donations on corporate financial performance when enterprises are in different life cycle.In the empirical research part, the thesis takes data from China’s A-share stock markets of Shanghai and Shenzhen during 2012-2014. After multiple linear regression analysis we find the result that, firstly overall enterprises participated in charitable donations do be able to promote their financial performance; from the results of regression results of group samples, we can tell that when enterprises are at growth stage and maturity stage, corporate charitable donations can also play a role in improving corporate financial performance. Furthermore, the effect on maturity stage is more apparent. On the other side, enterprises that are at recession stage have a distinctively negative correlation between their corporate charitable donation and financial performance, which means that enterprises in this period should give priority to the improvement of their performance and properly fulfill their CSR, otherwise the situation of the enterprise could only be worse and place extra burden to the enterprise operation.The whole thesis is divided as five parts, as follows:The first part is an introduction. This part outlines research background, theoretical and practical significance, and then makes a brief introduction about the contents, research methods and structure we use in this thesis.The second part is the literature review section. In this part, it sorts out and summarizes the domestic and foreign literatures about corporate charitable donations, the relation between corporate charitable donations and corporate life cycle theory respectively. Based on this, the research angle of this thesis is found out.The third part is the theoretical analysis and hypothesis deduction. This part describes four basic charitable donations theories, and then analyses enterprises operating features and cash flow conditions in different periods. At the same time, on the basis of all above theoretical analysis, it poses four hypotheses.The fourth part is the empirical study of relation between corporate charitable donations and corporate financial performance based on life cycle theory. Combining the theoretical analysis before, this part constructs multiple linear regression and then use descriptive statistical analysis, correlation analysis and multiple regression analysis test the research hypothesis it proposes. Finally, the thesis will carry out the robustness test with the method of variable index replacement.The fifth part is conclusions, policy recommendations and research limitations. This part mainly summarizes the conclusions of the research and then put forward some relevant policy recommendations, and finally point out the limitations of this thesis and expectations for future research.The main innovations of this thesis are the following three aspects:(1) In this thesis, we select three years’consecutive data to study the relation between corporate charitable donations and financial performance which is different from previous studies using only one year’s data or based on a special event; (2) Introducing the life cycle theory innovative, and considering the relation between corporate charitable donations and financial performance in a dynamic way to provide some self-suitable suggestions for enterprises when they make charitable donations decisions; (3) We adopt one year log charitable donations data in this thesis, so as to avoid endogeneity and the probability of lag influence on corporate financial performance. |
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