Research On Decision Usefulness Of Corporate Social Responsibility Disclosure

Discussions on Corporate Social Responsibility (CSR) began at early 20th century. In the past, the connotation of CSR was limited to its economic responsibility only. The aim of "Maximization of Shareholders'Wealth" required that an enterprise would finish its CSR only if it could make profits as many as possible. With the development of "Stakeholder Theory", CSR gradually got into its stride of conceptualization since 1970s. The connotation of CSR has enriched and developed in the decades. No agreement of the concept of CSR has been reached home and abroad up till now. However, essentially, CSR is not limited to economic responsibility any more, but also has extended to the interrelationship between the enterprise and the society. In general, I think CSR can be defined as the economic, jural, moral and charity responsibilities of an enterprise due to its externality of operations. In this thesis, CSR refers to all the above the responsibilities other than economic responsibility in a narrow sense. So CSR disclosure means the disclosures on the fulfillment of CSR other than economic responsibility.With the development of Socialist Market Economy, more attentions are paid to the non-economic aspect of the society. So the aim to build a "Harmonious Society" is brought forward. Under this background, fulfilling its social responsibility has always been an important way for an enterprise to take part in the contribution of "Harmonious Society". Especially these years, on one hand, public incidents such as "Poisoned Milk", "Hogwash Oil","Zijin Mining Pollution" and so on, reflect that there are many problem hidden in the social responsibilities of enterprises. These hot spots of society drew plenty of attention from the public. On the other hand, natural calamities become more often these years, and several serious disaster as cold disaster and earthquake cost thousands of people's life and huge loss in economy. How the enterprises performed in the face of natural calamities also become the topic in people's arguments. In a word, the public are paying more and more interests to CSR.More attentions require more disclosures. The practice of disclosure of CSR information of our domestic enterprises, esp. listed companies, has got periodic development. In 2007, numbers of listed companies who disclosure CSR information through CSR report largely increased compared to the past. In 2008 and 2009, not only the CSR reports of increased by a wide margin, Group companies other than listed companies and industry associations also publicized their CSR report. And the quality of the reports improved. In 2010,471 listed companies publicized their CSR reports while publicizing their financial reports. Before 2007, the information of CSR spread in the annual reports of the listed companies, irregular without independent reports. So situation improved a lot.Enacted and improved rules and regulations on CSR disclosures play an important role in improving the fulfilling of CSR and the disclosure practice. CSR fulfillment and CSR disclosure are different, the former is the action and the latter is the disclosure. Our present regulations rarely specify these two aspects, with more general regulations on CSR fulfillment and more specific regulations on CSR disclosure. SZSE enacted a policy named "Guidelines for Listed Companies on Social Responsibility", which opened a new page for the development of policies on CSR disclosure. From then on, State-owned Assets Supervision and Administration Commission of the State Council, SHSE, local government of Fujian, associations of Finance, Industry and Textile and Clothing published their regulations on CSR disclosure, which largely pushed the development of standardized CSR disclosure. However, the enacted regulations only tell us the direction not the exact way to operate. We don't have official disclosure standards. The policies published by industry associations were not mature.Facing the achievements, we also need to calm down and realize the problems still there. Due to the immaturity of the regulations, the quality of the publicize CSR reports is uneven. To analyze the status in quo of CSR disclosure and improve the situation, our researchers have done many studies from both normative and empirical aspect. After the study of the current situation and policy background of CSR disclosure, I determined what to study and how to study and finally accomplished the whole paper, which constitutes of six chapters. I decided to use event study to analyze the market reaction on specific events based on Decision Usefulness to study the domestic CSR disclosure.Chapter 1 is Literature Review on researches on CSR disclosure done by researchers from home and abroad. Evaluate the results of the study and put forward the inspiration for future research.Chapter 2 is Regulation Background Analysis. I summarize the current laws and regulations on CSR deeds and CSR disclosure, evaluate the pluses and minuses of these policies, and explain the importance of the development of the regulations for my research.Chapter 3 is Theoretical Basis. I explain the important concept of CSR and CSR disclosure, distinguish the concepts of CSR deeds and CSR disclosure and build a framework for the basic concepts of CSR disclosure. Then I analyze the interrelationship among the current theories and design a framework of theories for CSR disclosure research, which is on the basis of Decision Usefulness theory and assorted according to the demand and the supply of information.Chapter 4 is Event Study on the Market Reaction of Corporate's Donation for Yushu Earthquake. I chose 17 pairs of samples of donation and without-donation to study whether the investors would pay attention to the donation and prefer to invest in a company who donated to one who didn't.Chapter 5 is Event Study on the Market Reaction of the Rank Evaluation of CSR report from RSK. This study is aim to analyze whether the investors would find the rank of CSR report from RSK decision-useful. I chose 9 pairs of samples of higher marks and lower marks. It is a study on the market reaction of different level of CSR disclosure.Chapter 6 summarizes the results of both normative research and empirical research, analyzes the limitations on current research and put forward what worth further study in the future.I've got valuable results of both normative research and empirical research.In normative research, I clearly distinguished the relationship among the concepts of CSR, CSR fulfillment and CSR disclosure. I regarded the public fulfillment of CSR as a method to disclose the CSR information to the stakeholders, other than literal reports. Then I analyzed the present theories on CSR disclosure in a creative way, found the internal relationship among different theories and in the end build a framework of theories on CSR disclosure. It contributes to future study on CSR research for study on each aspect can find the theory basis from the framework. As a basis, distinguishing of basic concepts of CSR disclosure is also important.In empirical research, I did two event studies. One is the market reaction of Donation for Yushu Earthquake. Results shows that corporates who donated on the CCTV ball can get positive abnormal return. This results means at least in Yushu Earthquake, investors would prefer the corporates with CSR deeds. The other study is on the mark reaction of different level of CSR disclosure. I chose the rank of CSR report publicized by RSK as the standard to measure the level of CSR report. Results shows that the rank of CSR report published by RSK didn't statistically significantly influenced the decisions of the investor. Average cumulative abnormal returns for samples with higher rank of CSR report is not statistically significantly higher than the ones with lower rank. It is not precise to conclude that CSR report rank is decision useful less. However, it reflects the rank of CSR report published by RSK institute may not influence the decision of the investors. Further study on the market reaction on the marks rather than the rank of the CSR report is worthwhile.The innovations in this dissertation are as follows:First, I am the first one to use event study method to research on the market reaction of CSR disclosure. Second, it is the first time for a market reaction study on the specific donation CSR deeds done by the corporate, the result of which partly reflects the attitude of the investors on corporate donation in public issues.Limited to event study, the results of the study could not be popularized to other parts. But the method I used and the framework of theories I built can contribute for future studies on CSR disclosure. It is worthwhile to study the decision usefulness of different CSR information with larger sample scale and do further research on apply the theory system I put forward to practice in the future.