Research On The Impact Of Charitable Donation On Equity Financing Cost In The Background Of Executives’ Shareholding

With the continuous development of the economy and society,the awareness of corporate social responsibility has gradually increased,and corporate charitable donation is one of the important manifestations of fulfilling social responsibility,and its role is increasingly significant.At present,China is in a crucial period of comprehensive and deepening reform.The development of philanthropy is conducive to the construction of harmonious socialism.The official promulgation of the "Charity Law" in 2015 and the improvement of other laws and regulations have further regulated the philanthropy in China and promoted the spread of charity culture.Since then,the company’s enthusiasm for charitable donations has risen sharply.Together with the public’s various selection and recognition activities for enterprises,the company has begun to actively fulfill its social responsibilities and participate in charitable donations.So what are the real motives for these companies to actively participate in charitable giving? Many scholars study the purpose of corporate charitable donations from the perspective of business performance,but they have not formed a unified conclusion.This article needs to find a new perspective to further understand charitable donations.Corporate finance is an important issue that enterprises can’t ignore.It is the key to sustainable development of enterprises.Equity financing is one of the most important financing methods for listed companies.With the gradual improvement of corporate social responsibility,how do we make corporate charitable donations? It is very important to link equity financing issues together.At the same time,corporate executives’ shareholding plays an important role in the company’s governance structure,which plays a significant role in the strategic decision-making,business performance and supervision mechanism of the enterprise.Charitable donation is an important strategic decision of the company.It will be affected by various factors,and shareholders may influence the donation behavior because of the protection of their wealth.Therefore,this paper examines the relationship between charitable donations and equity financing costs from the perspective of executives.Based on the theory of information asymmetry,signal transfer theory,principal-agent theory,stock liquidity theory,and capital market information transmission law,this paper studies the impact of listed companies’ charitable donationson their equity financing costs.This paper not only studies the regulation effect of executives’ shareholding,but also studies the influence of the regulation of executives’ shareholdings under different property rights,in order to promote enterprises to actively participate in charitable donations,reduce the cost of corporate equity financing and finally form a virtuous circle.This paper selects all A-share listed companies from 2009 to 2016 as research samples,and uses cross-linear regression analysis to construct two regression models based on the research hypothesis proposed in this paper.Descriptive statistical analysis,correlation analysis and regression test were carried out on important variables in the study samples to study the impact of charitable donations on equity financing costs and the regulatory role of executives.The conclusion of this paper is:First,the charitable donation of a listed company has a negative impact on the cost of equity financing,which means that the enterpriseThe more charitable donations,the easier it is to ease the cost of equity financing.This is because when a company makes charitable donations,it can establish good relations with other stakeholders(government,society,banks,etc.)and gain the trust of investors and creditors,thus alleviating corporate financing pressure.Second,the executive stock holdings as a regulatory variable,the results show that with the increase in the proportion of corporate executives,the company’s charitable donations will weaken the cost of equity financing,which is a negative adjustment.Third,in non-state-owned enterprises,with the increase in the shareholding ratio of executives,the mitigation effect of charitable donations on the cost of equity financing will be significantly weakened.In state-owned enterprises,the easing of charitable donations by executives The effect is positive,but not significant.