ATJ Asian Tax Journal

Asian Tax Journal

Print ISSN 1738-3323 Online ISSN 2733-9270

The Analysis on the Impact of Corporation's Ownership Structure on the Level of Contributions

  • Kim, Jong-Seong Kim Jong-sung Tax & Accounting Office
  • Junghwa Hong Kyungwon University
  • Wan-hee Kim Kyungwon University

Asian Tax Journal Vol. 9 No. 2 (2008), pp. 105-126

Abstract

While necessity of donations is recognized by government agencies, enterprises and individuals. Within enterprises, the corporation's ownership factors may determine enterprise activity directions and the level of social contributions. Roles of foreigners are especially important not only as large enterprise stockholders, but also as determining factors in the era of open economy.Therefore, this study analyzed the relationship between corporation's ownership factors and donations for 418 companies registered in the stock exchange market from 1988 through December 2004, in order to evaluate the effects of corporation's ownership factors on donation expenses. The study findings can be summarized as below.First, increase in large stockholder share were found to have positive effects on donation expense levels, and foreigner share was found to have negative effects. But such factors were found to have insignificant influence for institutional investor share ratio and small investor share ratio. Therefore, in the activities of large stockholders and foreigners are deemed as determinant factors for enterprise donation expenses.Second, as for the miscellaneous variables influencing donation expenses, size of the corporation, advertising costs, research and development costs, and cash flow were found to have positive relationship and liability ratio was found to have negative relationship.Evaluation of the fore－mentioned study findings reveals that there are various variables determining the donation expenses, and that enterprise ownership structure, and enterprise equity are acting as vital factors. In addition, control variables, i.e., size of the corporation, advertising costs, research and development costs, cash flow, and liability ratio, were also found to have influence on donation expenses.

Keywords

  • Enterprise Donation Expenses. Donation Expense Levels
  • Change of Corporation's Ownership Factors

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