Research On The Effect Of Social Responsibility On The Strategy For The Corporate Finance

The study of corporate social responsibility has broken through the existing framework which just for shareholders-management,and formed the analysis framework for shareholders-stakeholders-management.Therefore,The Company's core concern has shifted from how to maximize the interest s of shareholders to how to balance the interests of shareholders and stakeholders.Corporate social responsibility essentially introduces externalities into the definition of the company's responsibilities,measures and tests the value of positive externa lities of the company,and at the same time pricing the strategy of negative externalities,emphasizing that the company not only serves the shareholders but also Should Cater to the needs of stakeholders.Therefore,introducing stakeholders to improve cor porate governance and improving corporate social responsibility has become an important means of preventing and controlling risks and improving corporates' management.Moreover,the corporate social responsibility may produce potential value.This value wi ll not be captured by the accounting statements,and it is difficult to be found or accurate.Firms could form the communication with the stakeholders through the annual social responsibility report and further expand their potential value.This paper,tak ing corporate social responsibility as the foothold,studies the impact of corporate social responsibility on corporate financial strategies,and has an important supplement to the expansion of Chinese business strategy.Firstly,This paper analyzes the performance of CSR in Chinese companies,and finds that: as a whole,there are more and more companies to disclose the information of social responsibility,but the proportion has declined slightly,indicating that new listed companies are lack of motivation to disclose social responsibility.As far as social responsibility disclosure sub projects are concerned,listed companies prefer to disclose the protection of workers' rights and interests,the protection of shareholders' rights and interests,the environment and sustainable development,the public relations and social public welfare undertakings and the protection of the rights and interests of customers and consumers.As far as the industry is concerned,such industries as manufacturing,mining,water conservancy,environment,housing and catering which are most closely related to environmental protection and household consumption are more likely to disclose social responsibility information.Regarding the nature of ownership,the information disclosure degree of social responsibility of private enterprises is slightly better than that of state-owned enterprises,but the differences between corporate individuals are still quite different.Secondly,we explore the peer effect between CSR performances.Socia l responsibility is regarded as a signal of the improvement of corporate governance.From the perspective of investors,even regulators and a broader stakeholder,The implementation of social responsibility can slow down the friction between the company and the society or stakeholders,improve the company's ability of sound operation and reduce the company's expected risk.In the industry,social responsibility is regarded as an important means for enterprises to obtain competitive advantages.Then,there may be motives for firms to do more social responsibility than competitors to achieve social and market recognition.Based on the research design of peer effect,this paper explores the motivation of Chinese enterprises to do social responsibility.The research shows that the performance level of the company's social responsibility is positively related to the level of the social performance of the peer company,indicating that the company has the motivation to improve the performance of social responsibility under the peer effect.What is more,this paper studies the social responsibility gap within the industry,and finds that when there is a big gap between companies and peer companies,the company has a stronger motivation to improve the performance of social responsibility.in addition,this paper Further explores what types of enterprises are more interested in social responsibility imitate and finds large scale,low growth and non-state-owned enterprises are more like to imitate their peers' social responsibility strategies.Thirdly,we study the mechanism of corporate social responsibility on capital structure.In the past,corporate social responsibility is considered not only as a risk control means(regulatory hypothesis),but also as a means for fir ms to make communication with the stakeholders(the information asymmetry hypothesis).Based on the regulatory hypothesis,the performance of social responsibility will encourage stakeholders to participate in corporate governance,reduce the company's inv estment in risky projects,and improve the firm's ability to operate steadily.For example,employee oriented companies often prefer to lower leverage ratio.Based on the hypothesis of information asymmetry,the performance of social responsibility will make the stakeholders obtain non-financial information,enhance the transparency of the company,improve the information asymmetry between the company and the creditor,alleviate the financing pressure and increase the leverage level.Based on the hypothesis of supervision and information asymmetry,the relationship between corporate social responsibility and capital structure is controversial.In this paper,the DID(Difference-In-Difference)method is used to study the changes in the capital structure level and adjustment speed of Chinese companies before and after the performance of social responsibility.The empirical study found that: The companies with high social responsibility performance prefer the low leverage capital structure and speed up the adjustment of the capital structure to the optimal capital structure,indicating that after the performance of social responsibility,the enterprise will control the risk more and adopt a more robust capital structure.in addition,This chapter further expands the relationship between social responsibility and capital structure,focusing on the performance intensity of social responsibility.It is found that the influence mechanism of corporate social responsibility on capital structure is nonlinear.In other words,When the strength of social responsibility is low,the capital structure tends to lower lever with the improvement of the performance of social responsibility,and when the strength of social responsibility fulfilling the threshold,the capital structure tends to higher lever,in other words,the relationship between the performance intensity of social responsibility and the capital structure,as the performance intensity of social responsibility is increased.It is the U type structure.Lastly,this paper studies the impact mechanism of corporate social responsibility on earnings management.In past studies,earnings management has been regarded as the source of information asymmetry between managers and shareholders.So that,Social responsibility may be a potential tool for managers to release signals,unite stakeholders and reduce the probability of being dismissed.Social responsibility is regarded as an important mechanism to establish a reputation between enterprises and entrepreneurs.The performance of social responsibility is equal to releasing positive signals to the stakeholders and setting up a responsible image.However,in international research,it is found that corporate managers may use social responsibility information to disguise their behaviors,especially for corporate disadvantaged behaviors(Heminway and Maclagan,2004).Salewski and Zulch(2012)also points out that European companies who publish social responsibility information prefer higher earnings management.This paper explore s the impact of corporate social responsibility on earnings management in Chinese enterprises.The results of empirical research show that the performance of social responsibility will improve the level of earnings management.In order to further explore t he impact mechanism,this paper studies the influence mechanism of ownership and market structure on the relationship between social responsibility and earnings management,because non state owned enterprises and monopoly industries are facing stronger supervision and mistrust of shareholders or stakeholders.Therefore,If social responsibility can alleviate conflicts with company managers or hide managers' behaviors,a more powerful mechanism can be observed.The empirical findings support the related research hypothesis: First,when it comes to disclosure of social responsibility information,non-state-owned companies have stronger incentives for earnings management than state-owned enterprises.Second,when it comes to disclosure of social responsibility information,compared to competitive industries,monopoly industries have a preference for earnings management.