Corporate philanthropy, political connections, and costs of equity capital
研究中国A股上市公司2007-2018年数据发现，企业慈善捐赠会提高股权融资成本，但无政治关联高管、经历省级官员更替或位于财政压力大省份的企业不受此影响；反腐运动后，投资者对战略性捐赠要求更高回报。
Abstract We examine how investors' perceptions of firms' philanthropic behaviors alter the effect of corporate philanthropy on costs of equity capital. Using a sample of Chinese A‐share listed firms from 2007 to 2018, we find that firms making philanthropic donations have higher equity financing costs. In contrast, firms without politically connected executives, experiencing provincial official turnovers, and located in provinces with fiscal pressure do not see an increase in costs of equity capital. In addition, Chinese investors consider strategic corporate philanthropy to establish political connections less valuable after anticorruption campaigns are launched, hence requiring higher rates of return from firms making monetary donations. Overall, this paper provides evidence that investors' perceptions of firm behavior are shaped by unique institutional factors in emerging markets, resulting in unintended economic consequences for firms.