The Relationship Between Executive Power,corporate Donations And Enterprise Value

The target of an enterprise is to maximize their economic interests while donate is to use the assets of the enterprise on things that are not directly related to the economic interests of the enterprise.It seems that donation is a behavior that will increase the cost of an enterprise without bring in any economic interest.The role the power of executives plays in the relationship between the donation of an enterprise and its value and the meaning of donations have been a heated discussed topic.The relationship between the power of executives and donations is examined by listed companies in China during year 2009 to year 2014.The role the power of executives can also be examined by the data.The results show that,there is a positive correlation between the power of executives and enterprises’ willingness and strength of corporate donation.What’s more,the degree of the correlation is different in state-owned enterprises and non-state-owned enterprises.There is a higher degree of correlation in state-owned enterprises.What’s more,there is a negative correlation between the power of executives and the relationship between donation and value of the enterprise.The more powerful the executives are,the less value it will bring by donation.The result is more obvious in state-owned enterprises.The innovations of the empirical analysis lie as follows.Firstly,it’s a new aspect to study the relationship between donations and the value of an enterprise by using the power of executives.Secondly,there is a practical significance to our country by dividing the enterprises into state-owned and non-state-owned enterprises to find out the differences in the roles that executive power plays.