Research On The Impact Of Corporate Donation On Financing Constraints

One of the main forms of social responsibility undertaken by Chinese enterprises is that "Poverty is good for itself,while attainment is good for the world at the same time ".From the perspective of corporate donations,companies with strong profitability and financial strength are often willing to assume more social responsibility,whether it is the number of times they participate in public welfare undertakings or the amount of charitable donations,which are greater than companies with weak profitability and poor financial strength.But in the era of informatization and digitization,the donation behavior of enterprises in unexpected events will form a publicity effect,which will quickly accumulate high attention from investors and gain market attention and recognition.In the "July 20" extremely heavy rainstorm in Zhengzhou,Henan Province in 2022,Hongxingerke donated 50 million yuan of materials to the hot news.Thanks to the donation,the enterprise’s profitability has been greatly improved.On the other hand,the problem of "difficult and expensive financing" for private enterprises still exists.Moreover,with the development of digital finance,while improving the efficiency of information transmission,it will also lead to the problem of information asymmetry.So,we can’t help but ask whether corporate donation behavior will improve the financing constraints of enterprises? What impact will the development of digital finance have on corporate donations and financing constraints?Based on the above background,the paper studies the relationship between corporate donations and corporate financing constraints,as well as the impact of digital finance development on this relationship.Firstly,by summarizing and learning relevant theoretical literature on corporate financing constraints,corporate donations,and digital finance development,a theoretical framework for corporate donations to alleviate corporate financing constraints has been formed.The main reason for corporate financing constraints is information asymmetry in the financial market,but both donation behavior and digital finance development can effectively improve the information asymmetry situation in the market.Secondly,we selected listed companies in China from 2011 to 2020(excluding the financial industry)that participated in public welfare and charitable donations as research samples,and empirically tested the moderating role of digital finance development in the above relationships through multiple regression models and fixed effects models.Finally,based on theoretical analysis and empirical research,targeted countermeasures and suggestions are proposed.The research conclusion indicates that: firstly,the donation behavior of enterprises helps them reduce tax costs,broaden financing channels,and thereby reduce the degree of financing constraints they are subject to;Secondly,the development of digital finance can effectively reduce information asymmetry in the financial market,improve financing efficiency,reduce financing costs for enterprises,and thus alleviate the financing constraints faced by enterprises.Thirdly,the development of digital finance will have a significant negative impact on the relationship between corporate donations and financing constraints,which means reducing the economic benefits of corporate donations.