The Impact Of Executive Equity Incentives On Corporate Social Responsibility Disclosures

The idea of CSR(CSR)gained currency in the 1960 s.It requires enterprises to take social responsibility.Beyond its shareholders,enterprises should also bear the responsibility to broader set of stakeholders such as creditors,employees,consumers,suppliers,governments and the public.Nearly 10,000 companies from more than 160 countries have joined and signed the United Nations Global Compact,which aims to promote sustainable development and requires firms to bear social responsibility in human rights,labor,the environment,and anti-corruption.In 2006,Shenzhen Stock Exchange promulgated and implemented the Guidelines on Corporate Social Responsibility for Listed Companies,advocating that listed companies regularly disclose their social responsibility reports.In September 2009,the Shanghai Stock Exchange required some listed companies to disclose their social responsibility reports while disclosing their annual reports.According to CSMAR,only 47 listed companies issued social responsibility reports in 2007,up from 471 in 2010 to 795 in 2017.However,with the rapid development of China's economy,irresponsible incidents that endanger the society by enterprises have occurred repeatedly.The use of child labor,medical safety,food safety,and environmental pollution among other issues have led a widespread concern on CSR among scholars and the public.However,only little literature focuses on the effect of CSR disclosure and its driving forces.Studies mainly focus on CSR disclosure driving factors such as national institution,industry competitiveness,etc.,while no literature pays attention on the effect of corporate executive equity incentives in China.Studies have shown that firms committed to enhancing long-term value-added will engage in CSR activities and improve their social responsibility disclosure level.Separation of ownership and management rights is an important feature of modern enterprises.As an effective means to adjust the conflicts of interests between shareholders and managers,equity incentive has become an important tool for internal governance of enterprises and long-run development of enterprises.Therefore,it is of great theoretical and practical significance to study the impact of executive equity incentives on CSR disclosure.In recent years,an increasing number of listed companies have announced equity incentive plans in China since 2010.With the implementation of equity incentive plans by many listed companies,the effect of equity incentive of Listed Companies in China has gradually become the focus of research.Compared with developed countries such as the United States,China's implementation of equity incentive plans has a special institutional background,that is,performance-based equity incentive.Only when the performance conditions of exercising power that is met can the corresponding authorization or exercising power be obtained and there is a longer period of exercising power and lifting ban.This dissertation studies the effect and mechanism of executive equity incentive on CSR disclosure by using fixed effect model,propensity matching score(PSM)method and natural experiment(Difference-in-Differences).This dissertation also studies the dynamic impact of the right incentive plan on CSR disclosure.Firstly,after sorting out the existing literature,this dissertation studies the impact of executive equity incentives on the overall level of CSR disclosure,analyzes the impact of executive equity incentives on CSR disclosure under different conditions,and analyzes the underling mechanism.Secondly,this dissertation discusses the impact of executive equity incentives on CSR disclosure under the conditions of external legitimacy pressure,different degree of marketization,ownership concentration,and board governance.In addition,this dissertation discusses the impact of executive equity incentives on the disclosure of corporate social welfare information,and further analyzes the impact of executive equity incentives on these disclosure under different conditions,and analyzes the impact of the way.Finally,this dissertation explores the impact of executive equity incentive on environmental protection disclosure.This dissertation explores the different effects of executive equity incentives on environmental protection disclosure from the perspectives of different environmental sensitivity,legitimacy pressure and incentive modes.This dissertation consists of seven chapters.The first chapter is the introduction,which introduces the research motivation,research problems,research background and innovation of this dissertation.The second chapter reviews the classical literature on equity incentives and CSR,reviews the relevant theories on equity incentive and CSR disclosure.The third chapter introduces the institutional background of equity incentive and CSR disclosure in China.The fourth chapter studies the influence of equity incentive on CSR disclosure and the different impacts of executive equity incentive on CSR disclosure under different conditions.The fifth chapter begins with the disclosure of social public welfare information and analyzes the impact of executive equity incentives on corporate social public welfare information disclosure.Chapter 6 discusses the impact of executive equity incentives on environmental protection disclosure.The seventh chapter summarizes the dissertation,draws conclusions and policy recommendations,and proposes directions for further research.The results show that the implementation of executive equity incentives in Chinese enterprises improves the level of CSR disclosure,but under different corporate characteristics and environmental conditions,the impact of executive equity incentives on the level of CSR disclosure is different.Firstly,this dissertation finds that the disclosure effect of executive equity incentives is different under different internal governance structures.The combination of chairman and general manager weakens the effect of executive equity incentive on CSR disclosure.In addition,we also find that the governance of large shareholders can lower the impact of equity incentives on CSR disclosure.Under the ownership structure characteristics of "one share is dominant",the management power embodies the power of the major shareholder.We also find that under different external legitimacy pressures and market-oriented process conditions,executive equity incentives have a different impact on CSR disclosure.Under the pressure of external legitimacy,in order to increase long-run value,enterprises need to take measures to alleviate the pressure of legitimacy brought by external stakeholders,so as to enhance the impact of executive equity incentives on CSR disclosure.Higher marketization,the effect of executive equity incentives on CSR disclosure is greater.In addition,this dissertation also finds that executive equity incentive plans have a dynamic impact on CSR disclosure.This dissertation then examines the impact of executive equity incentives on corporate social welfare information disclosure,and finds that executive equity incentives have a significant positive impact on corporate social welfare information disclosure,and have a significant positive impact on the core form of social welfare,namely,the disclosure of social donations.However,under the pressure of different property rights and legitimacy,the impact of executive equity incentives on corporate social welfare disclosure and corporate social donation disclosure is different.At the same time,through empirical analysis,we found that the increase in the disclosure of social donation information is the main way to enhance the disclosure of corporate social welfare information.Finally,this dissertation examines the impact of executive equity incentive on the disclosure of corporate environmental protection.The study found that executive equity incentive has a significant positive impact on corporate environmental protection disclosure.This dissertation analyzes the impact of executive equity incentives on corporate core environmental performance information disclosure.It is found that executive equity incentives have a positive effect on the quality of corporate environmental protection input,and the impact of executive equity incentives on corporate carbon emission disclosure is not significant.The reason may be that with the promotion of equity incentive plan,the annual total output and total income of enterprises continue to rise rapidly,while the speed of environmental protection technology is slow,resulting in an increase in total carbon emissions.However,the disclosure attitude of senior executives "reporting good news without reporting bad news" leads to the reduction of carbon emission disclosure level after equity incentives come into effect.In addition,we find that the promotion effect of executive equity incentives on corporate social responsibility disclosure is greater in the case of heavy pollution industries that face greater legitimacy pressure.This indicates that the disclosure effect of equity incentive on corporate social responsibility is more remarkable under the pressure of public and government supervision.This dissertation contributes to the literature in several ways.First,the topic of the dissertation on Chinese firms are new.Most of the existing literatures focus on the economic impact of social responsibility-related behaviors,but the research on the influencing factors of CSR is relatively small.In the literature on the influencing factors of corporate social responsibility,scholars generally tend to study from the perspective of external pressure of enterprises,such as institution and industry competitiveness,but few from the perspective of internal governance.Secondly,this dissertation adopts using natural experimental methods or quasiexperimental methods.Beyond the fixed effects approach,this paper uses PSMDifference-in-Differences(Di D)to identify the impact of executive equity incentives on CSR disclosure.This is new in the current related literature.This method can reduce the endogenous problems that may arise when estimating the impact of executive equity incentives on CSR disclosure,and ensure the effectiveness and robustness of the empirical results.Thirdly,this paper makes a comprehensive use of micro-data,and makes a detailed and specific analysis of the effect of executive equity incentives on CSR disclosure,enriching the relevant research literature.This paper chooses Runling Global Social Responsibility Report(RKS)rating database and CSMAR(China Listed Companies Research Database)developed by Guotaian Company to measure the level of CSR disclosure of Listed Companies in China.These datasets enable me conduct rich statistical analyses,reduce estimate bias,and reach accurate conclusion.