Based on the principal-agent theory, this paper makes an empirical research on the motivation of corporate donation from the perspective of institutional environment changes. It finds that the higher the agency costs are, the greater the sizes of corporate donations are, showing the existence of the agency problem in corporate charitable donation behavior. In addition, the optimization of the external system environment like formal institutions measured by marketization degree and informal institutions measured by trust environment can ease the agency problem in corporate donation behavior. It shows that the external system environment can play a certain role in corporate governance, weaken the impacts of corporate agency costs on the donation sizes, and ease the agency problem of corporate donations. The further research also indicates that corporate state-controlled nature and traditional business group culture have significantly enhanced the agency problem of corporate donations, but political connections have no significant impact on the agency problem of corporate donations. The above conclusions are supported by the evidence from Shanghai A-share manufacturing from 2008 to 2013. This paper provides empirical evidence for the agency problem of corporate donations, and also a reference basis for standardizing and guiding corporate donation behavior from the perspective of institutional environment changes, thereby being beneficial to a more comprehensive understanding of corporate agent problem and donation behavior in the overall institutional environment．
Agency Costs, Institutional Environment Changes and Corporate Charitable Donation: Empirical Evidence from China's Manufacturing Industry
Journal of Shanghai University of Finance and Economics Vol. 19, Issue 01, pp. 75 - 87 (2017) DOI:10.16538/j.cnki.jsufe.2017.01.007
Cite this article
Huang Songqin. Agency Costs, Institutional Environment Changes and Corporate Charitable Donation: Empirical Evidence from China's Manufacturing Industry[J]. Journal of Shanghai University of Finance and Economics, 2017, 19(1): 75–87.
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