| In recent years,social responsibility information disclosure has received increasing attention.More and more countries and regions have begun to issue laws and regulations to force enterprises to disclose social responsibility reports.Since December 31,2008,China officially started to implement the mandatory disclosure of social responsibility reporting system within the scope of listed companies.The Shanghai Stock Exchange issued documents requiring that firms listed in Shanghai Stock Exchange "Corporate Governance Sector",firms with shares listed overseas and Financial Companies were henceforth required to disclose social responsibility reports.The Shenzhen Stock Exchange issued similar documents requiring the "Shenzhen 100 Index" must disclose social responsibility reports.The release of these two documents marks that China's social responsibility disclosure system has entered a new era of mandatory disclosure.The implementation of compulsory disclosure policy aims to promote the awareness of social responsibility of enterprises and their stakeholders.Based on the current institutional environment and capital market in China,whether the listed companies,as the main part of economy,can actively implement the compulsory disclosure policy and gain benefits for themselves while improving the performance of social responsibility,which is a practical problem that policy making departments and enterprises themselves pay more attention to.Costs and benefits are decisive factors affecting the level of corporate financial performance.From the perspective of social responsibility costs and social responsibility benefits,this article systematically explores the effect and mechanism of mandatory disclosure of social responsibility reports on corporate financial performance,conduct an extended analysis based on China's institutional environment.The purpose is to reveal the economic consequences of mandatory corporate disclosure of social responsibility reports from the perspective of costs and benefits,expand the understanding of regulatory authorities and companies on the economic consequences of mandatory disclosure of social responsibility reports,promote companies to positively implement mandatory disclosure and enhance strategic social responsibility management philosophy.And provide more abundant empirical evidence for the formulation and improvement of social responsibility information disclosure regulations.Compared with countries and regions such as India and the European Union,China's mandatory disclosure policy has a lower legal level.It only belongs to the self-discipline rules of the stock exchange,and only requires the form of disclosure.The specific social responsibility performance is left to the enterprise.There is room for discretion,and the cost of corporate violations is relatively low.Therefore,the basic logic of China's mandatory disclosure policy is to improve information conditions,alleviate information asymmetry,and enhance information transparency by providing economic returns to companies that have good social responsibilities performance through market behaviors,and apply market constraints to companies that do not have good social responsibilities performance,so that stakeholders can more easily understand the performance of corporate social responsibility.That is to say,mandatory disclosure policies indirectly affect corporate social responsibility performance by alleviating information asymmetry.Since companies have greater discretionary space for their social responsibility performance levels,it is necessary to take into account of the company's strategic response to the mandatory disclosure policy.Different strategic responses to the mandatory disclosure policy will affect the company's specific social responsibility performance,and thus show different social responsibility costs and benefits of social responsibility,and have a diametrically opposite impact on financial performance.This paper propose a "strategic hypothesis" based on stakeholder theory and strategic social responsibility theory,and a "defensive hypothesis" based on legitimacy theory and principal-agent theory.Under the "strategic hypothesis",a company's strategic strategy will be reflected in the cost of social responsibility for specific stakeholders,and at the same time,it can obtain social responsibility benefits through the improvement of stakeholder relationships,thereby improving financial performance.Under the "defensive hypothesis",the defensive strategy of an enterprise will lead to inefficient cost expenditures without strategic planning,it is difficult to obtain social responsibility benefits,and it will lead to a decline in financial performance.Based on the "defensive hypothesis" and "strategic hypothesis",with "mandatory disclosure of social responsibility reports-social responsibility costs and social responsibility benefits-financial performance" as the main line,the empirical research content of this article mainly includes the following four aspects:(1)Study the overall impact of mandatory disclosure of social responsibility reports on financial performance.Based on the research design of the Propensity Score Matching Double Difference Model(PSM-DID),using sample data from 2006 to 2011,it is found that after the implementation of the mandatory disclosure policy,the financial performance of listed companies that have disclosed social responsibility reports has dropped significantly,comparing with listed companies that have not disclosed social responsibility reports.Taking into account of the possible differences in long-term policy impacts,and further based on the research design of the two-way fixed effects model,using sample data from 2008 to 2019,it is found that the financial performance of listed companies that disclosed social responsibility reports is still significantly lower than that of undisclosed listed companies.Moreover,there is still a lag effect on this impact,which has a significant negative impact on the financial performance of the lagging period 1-3.At the same time,the average quality of social responsibility report has no strong correlation with financial performance because the average quality of the report is low.The research conclusions support the "defensive hypothesis" of the company's strategic response to mandatory disclosure policies,and no evidence supporting the "strategic hypothesis" has been found.In addition,after further considering the impact of China's institutional environment,using the multiple regulatory regression analysis method(MMR)to test the regulatory role of the institutional environment,it is found that for industries and regions with high levels of industry competition and marketization,the effect of reducing financial performance by mandatory disclosure can be significantly alleviated.(2)Study the impact of mandatory disclosure of social responsibility reports on the cost of social responsibility.Based on the research design of the Propensity Score Matching Double Difference Model(PSM-DID),using sample data from 2006 to 2011,it is found that based on China's institutional environment and capital market,mandatory disclosure of social responsibility reports has led to an increase in corporate agency costs,which is manifested by a decline in the turnover rate of total assets.Taking into account of the possible differences in long-term policy impacts,and further based on the research design of the two-way fixed effects model,using sample data from 2008 to 2019,it is found that the agency costs of listed companies with mandatory disclosure of social responsibility reports are still significantly higher than those of undisclosed listed companies.However,the specific manifestation has changed from a decline in the turnover rate of total assets to an increase in the management expense rate.At the same time,this impact still has a lag effect,which has a significant positive impact on the management expense rate lagging 1-3 periods.The research conclusions support the"defensive hypothesis" of companies' strategic response to mandatory disclosure policies,and no evidence supporting the "strategic hypothesis" has been found.In addition,based on the impact of China's institutional environment,this paper find that the mandatory disclosure of social responsibility reports has increased social responsibility costs mainly in industries and regions with high competition and high marketization by testing the regulatory role of the institutional environment using the multiple adjustment regression analysis method(MMR).(3)Study the impact of mandatory disclosure of social responsibility reports on social responsibility benefits.Based on the research design of the propensity score matching method(PSM)and the two-way fixed effects model,using sample data from 2008 to 2019,it is found that from the current situation of the capital market,the mandatory disclosure of social responsibility reports exposes the current status of insufficient social responsibility performance.The exposion will lead to a decline in corporate reputation and consumer benefits,which will lead to corporate social responsibility losses.This impact has a significant negative impact on social responsibility benefits that lag 1-3 periods due to the time lag of information transmission.At the same time,it is found that only the content score directly related to the performance of social responsibility can significantly reduce the loss of corporate social responsibility,and the integrity and technical level of the report has no significant correlation with the benefits of social responsibility.In addition,based on the impact of China's institutional environment,this paper use the multiple adjustment regression analysis method(MMR)to test the adjustment effect of the institutional environmentit.It is found that in industries and regions with high levels of industry competition and marketization,the compulsory release of social responsibility reports can significantly inhibit the reduction of social responsibility benefits.(4)Based on the research conclusions of the first three aspects,this paper test the intermediary role of social responsibility costs and social responsibility benefits in the impact of mandatory disclosure of social responsibility reports on financial performance.Based on the research design of propensity score matching double difference model(PSM-DID)and stepwise regression coefficient method,using the sample data from 2006 to 2011,it is found that the cost and benefit of social responsibility can play a mediating role in the impact of mandatory disclosure of social responsibility report on financial performance.Mandatory disclosure of social responsibility report can reduce the financial performance of enterprises by increasing the cost of social responsibility and reducing the benifits of social responsibility.Considering the possible differences of long-term policy impact,based on the two-way fixed effect model and stepwise regression coefficient method,using the sample data from 2008 to 2011,it is found that the cost and benefit of social responsibility still play an intermediary role in the impact of mandatory disclosure of social responsibility report on financial performance.The contribution of this paper is mainly reflected in the following four aspects:(1)In view of the current research differences on the impact of mandatory disclosure of social responsibility report on financial performance,this paper systematically analyzes and clarifies the impact of mandatory disclosure of social responsibility report on financial performance from the perspective of defensive hypothesis and strategic hypothesis.(2)Based on China's institutional environment and capital market,this paper provides empirical evidence that mandatory disclosure of social responsibility reports will reduce financial performance,and also supplements and verifies the defensive strategic response of listed companies to mandatory disclosure policy from both theoretical and empirical aspects.(3)For the first time,this paper uses the method of intermediary variable,and takes the cost and benefit of social responsibility as the path to systematically elaborate and verify the internal mechanism of the impact of mandatory disclosure of social responsibility report on financial performance in China's institutional environment. |
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