Political Connection,Charitable Donation And R&D Investment

Under the current international circumstances,the technological innovation of enterprises has always been the focus of national attention and support.While as one of the decisive factors of technological innovation,it’s necessary to study the influential factors to R&D investment.Existing literature has taken the relationship between political connection and R&D investment of enterprises as an important research content,however,there is still a large space for exploration on the way how political connection affect the R&D investment.So on the basis of existing researches,this paper supplements charitable donation as an intermediary variable to further excavate the way how political connection affects R&D investment,which will enrich existing literature and offer realistic reference for corporates.To explore the specific relation of political connection with R&D investment and whether charitable donation plays a mediating role on this relation,this study selects the sorted panel data of A-share listed companies from 2012 to 2019 in China as research sample.Based on existing researches and related theories,this article tests each other’s inherent relation among political connection,R&D investment and charitable donation and verifies the mediating function of charitable donation empirically.The empirical results show that:(1)Political connection promotes R&D investment,and the effect is bigger in non-state-owned firms,indicating that political connection can bring some resources to firms;(2)There is a positive correlation between charitable donation and R&D investment,but the coefficient isn’t lagger in non-state-owned enterprises;(3)Political connection has a positive effect on charitable donation,and the effect is much greater than that of state-owned enterprises;(4)Charitable donations plays a mediating role in the relation between political connection and R&D investment.Furthermore,the mediating role is strongger in non-state enterprises.The mediating mechanism may work in the way that companies with political connection donates more to consolidate this connection so to gain more government subsidies and other resources.Based on the relationship between government and enterprises,this thesis studies the influence of political connections on the R&D input of enterprises and the mediating role of charitable giving,which enriches the studies of the intermediary mechanism of political connections to R&D input of corporates literally,and serves as reference for enterprises especially private enterprises when choosing whether to establish political connections or not,so as to make reasonable decisions.