The Insurance Function Of Charitable Donations For Crisis

Corporate social responsibility(CSR)has become a hot topic of research and attention of academia,business and the public.Enterprises as the economic subject,however,the first condition of its development is to promote economic performance.Although the existing research is controversial,but many scholars both at home and abroad generally believe corporate charitable donations act a positive role in promoting the enterprise value.As a result,more and more companies begin to take part in the charity team for thinking of strategic management.Also companies have become the mainstay of social donation in our country.Previous studies paid more attention to the relationship between charitable giving and enterprise value,which showed there is positive correlation between them.But few scholars study the injury insurance of charity donations with empirical method,especially our country.Previous most studies on insurance function of donation in a crisis situation only focused on a single industry or crisis enterprises directly involved.Based on stakeholder theory,this study examine whether the early charity donation of target enterprise can reduce a drop in its stock value after the incident in China.In addition,this article also explore whether industry environment characteristics have regulating effect on the insurance function.This article chooses July 23th train crash in Wenzhou in 2011 and data of 1093 target enterprise,through event analysis method and multiple regression analysis.Eventually we obtained the following conclusions:the more the charitable giving in early stage of target enterprises,the greater the cumulative abnormal returns of enterprise and the less drop in the stock,which verify the insurance function of charitable donations for overflow of crisis.When munificence of industry environment is lower,charitable giving insurance function is higher.When industry competition is greater,charitable giving insurance function is stronger,but dynamism has no effect on insurance function of charitable giving.