Research On The Relationship Between Philanthropy And Corporate Performance

For businesses,philanthropy is no longer a simple unrequited devotion,but enables businesses and Governments of mutual benefit and win-win.In the background of a special economic system,Chinese government has configuration right on the resource allocation.The size of the allocation right of the resources of the government is related to the degree of marketization of the area where the enterprise belongs.Different region has different Marketing degree,to which the right to allocate the resource of the Government is different.This paper studies the relationship between corporate philanthropy and corporate performance based on the moderating effect of the market development and political connection.Compared with the existing research,this paper used Heckman two-stage model and instrumental variables to solve three kinds of endogeneity problems caused by sample selection bias,reverse causality and omitted variables.We analyzed the relationship between philanthropy and corporate performance and how market development and political connection affected the above relationship.Using unbalance panel data of1194 Chinese listed enterprises from 2007 to 2014,we have found that philanthropy has no significant effect on improving corporate performance.Political connection has no significant moderating effect on the relationship between philanthropy and corporate performance.Philanthropy would play a greater effect on improving corporate performance of enterprises in a less developed market than that of a comparatively developed market.In a comparatively market development area,philanthropy would play a greater effect on improving corporate performance if the enterprise has political connection.In a lower degree of market development area,philanthropy would help to improve the corporate performance if the enterprise has no political connection.