Family Involvement,Agency Costs And Corporate Donation

With the increasing importance of the harmonious symbiosis of economic and environment,the awareness of social responsibility of most companies has generally increased.Among them,charitable donations are highly sought after by companies,especially family companies pay more attention to charity for the purpose of socioemotional wealth preservation.The difference between family businesses and non-family businesses is whether the family involvement.Under the "new normal" macroeconomic background,facing the "succession dilemma" combined with the "economic dilemma",it is not always possible to find suitable management personnel within the family,and the introduction of external professional managers may help the family business to get rid of the difficulties.In addition,the pyramid or cross shareholding methods of the family are easy to cause the interests of small and mediumsized investors to be encroached and damage the company's value.Therefore,there may be two kinds of agency problems in family businesses,that is,the agency problem between shareholders and managers,and the agency problem between controlling shareholders and small and medium investors.Family businesses themselves are keen on philanthropy.If there is a corporate donation at the cost of agency costs,it will not be conducive to the sustainable development of family businesses and the preservation of socioemotional wealth.Therefore,it is very important to optimize family businesses' charity donation mechanism while examining the impact of family involvement on corporate donation while exploring the impact of family business agency costs on corporate donations.This paper proposes relevant research hypotheses based on socioemotional wealth theory,principal-agent theory,charitable donation motivation,etc.The level of corporate donation is measured by the total amount of corporate donation,the degree of family involvement is measured by three indicators: the proportion of family ownership,the proportion of family members in senior management,and the family participation in management algebra,and the two types of agency costs are measured by the rate of management expenses and the level of capital occupation.In this paper,the relevant datas of 585 family businesses in A-share listed companies from 2013 to 2018 are selected for regression analysis using Tobit model.The conclusion of the study is that the higher the proportion of family ownership is,the more corporate donations are;the higher the proportion of family members in senior management is,the more corporate donations are;the family participation in management algebra is positively related to corporation donations but not significantly.Both types of agency costs have a significant positive impact on corporate donations,that is,the more serious the agency conflict between shareholders and managers,the more corporate donations,the more serious the agency conflict between large shareholders and small and medium shareholders,the more corporate donations.The above results indicating that although family businesses do not pay much attention to the economic goals of enterprises in pursuit of socioemotional wealth,but they are always committed to the sustainable development of the family and maintain the longevity of the foundation.However,the existence of corporate donations at the expense of agency costs has broken this balance.According to the research results,the following policy recommendations are proposed: promote the economic development of family businesses,regulate the external market environment to restrict agent behavior;improve the financial guarantee mechanism of corporate donations,and alleviate the charitable donation problems caused by agency costs;face up to the problems of family intergenerational inheritance and enterprise transformation,and formulate a clear succession plan;promote mainstream research in family businesses and strengthen theoretical guidance for the development of family businesses;promote legislation on corporate social responsibility,and implement the protection of the rights and interests of stakeholders such as small and medium investors.