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Communist Party’ Participation in Corporate Governance and Charitable Donation |
CHENG Haiyan1,2,LI Minghui1 |
1. Business School, Nanjing University
2. School of Accounting, Guizhou University of Finance and Economics |
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Abstract This paper investigates the participation of the Communist Party of China (CPC) in corporate governance and the impact on corporate charitable donation by using a unique hand-collected dataset that includes the Chinese A-share listed companies for the period from 2008 to 2017. We measure CPC Committee’s participation by “two-way entry” and “cross-appointment”. The results support the hypothesis that CPC committee participation in corporate governance is positively related with the firm’s charitable donation. Further tests show that the effect is not significantly different between state-owned enterprises (SOEs) and non-state-owned enterprises and that this positive effect is more significant in local state-owned enterprises than in central state-owned enterprises. In addition, we find that this positive effect is not at the expense of enterprise performance or enterprise value and that the effect of CPC participation in corporate governance on corporate charitable donations is not related with government subsidies. In summary, this paper demonstrates that the participation of CPC committee in corporate governance through the “two-way entry, cross-appointment” system can promote the corporate donation behavior, and it provides empirical evidence about the role of CPC committee’s participation in corporate governance.
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Received: 16 March 2020
Published: 15 May 2020
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Corresponding Authors:
LI Minghui
E-mail: xdlmh@sina.com
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