Political Connections And Corporate Charitable Donations

In recent years,China’s philanthropy has developed vigorously.The total amount of social donations in China has reached 112.8 billion yuan in 2018.With the deepening of reform and opening up,private enterprises in China have undergone difficulties and hardships of more than 40 years.Now they have played an important role in the national economic development,and also in charity.The annual donation amount of private enterprises in China has reached 45.032 billion yuan in 2018,which accounts for 50.55%of the total annual donation amount of enterprises.Therefore,it is particularly important to study the charitable donation of private enterprises.The research on charitable donation has always been a hot topic in academic circles,and the research on the motivation of charitable donation has never stopped.However,through combing the previous literature,we found that the research on political connection and charitable donation is slightly insufficient.Based on the background above,this paper mainly studies the political connection and charitable donation of private enterprises in China.First,the hypothesis of this paper is obtained through theoretical analysis,and then the hypothesis of theoretical analysis is verified by testing the data of private listed companies in 2009-2018 in China.Through the research,we found that:(1)With other conditions unchanged,political enterprises are more likely to donate charity,and the level of donation is higher,compared with no political associated enterprises.The higher the level of political connection,the greater the possibility of charitable donation of private enterprises,and the higher the level of donation.(2)With other conditions unchanged,the higher level of marketization is positively regulating the positive correlation between political association and corporate philanthropy.(3)The donation of private enterprises with political connections plays an exemplary role,that is,more donations of the private enterprises with political connection can promote the donation of the private enterprises without political connection.In the further analysis,this paper focuses on the special group of state-owned private enterprises.Therefore,we will specify the research sample.Through further analysis,we found that:(1)the charitable donation of state-owned private enterprises is more similar to that of ordinary private enterprises,that is,it is more a kind of market behavior rather than completing the government’s"apportionment" task behavior.(2)The suspicion of "original sin" of private enterprises will urge enterprises to make charitable donation.The main contributions of this paper are as follows:(1)this study is based on the publicly disclosed data of private listed companies in China,rather than a special natural disaster event.The data sample size is large and more accurate,which provides incremental empirical data for the study of the relationship between political connection and charitable donation.(2)In this paper,private enterprises are divided into two groups:those with political connection and those without political connection.Then we will study whether the additional donation of private enterprises with political connection has an impact on the private enterprises without political connection,which expand the depth of relevant research.(3)The existing literature research has found that the stateowned enterprises’ charitable donation has the nature of "apportionment",while the private enterprises’ charitable donation is more a kind of market-oriented behavior,but less attention is paid to the nature of the state-owned restructuring private enterprises.The research of this paper makes up for this blank.(4)There are few existing literatures on the relationship between the suspicion of "original sin" of private enterprises and charitable donation.This paper finds that the suspicion of "original sin" of private enterprises urges enterprises to make charitable donation,which not only expands the research on the economic consequences of the suspicion of "original sin" of private enterprises,but also expands the research on the influencing factors of charitable donation.