An Impact Research About The Effects Of CSR Information Disclosure On The Cost Of Equity Financing

By raising the level of corporate social responsibility information disclosure，we can notonly effectively alleviate the information asymmetry between corporate external investors andinternal management, but can also enhance the company’s public image, which will contributeto the liquidity of shares of listed companies, and further can lead to the reduction of the costof equity financing. Therefore, studying the effects of corporate social responsibilityinformation disclosure on the cost of equity financing is of great significance.Firstly, this paper gives a literature review of previous studies of scholars,then introducethe relevant theories of corporate social responsibility and the cost of equity financing, afterthat we two put forward hypotheses in this article based on the literature review and thetheories, hypothesis1is that in the case of other conditions remain unchanged, a negativecorrelation between the level of information disclosure of corporate social responsibility andthe current cost of equity financing, hypothesis2is that in the case of other conditions remainunchanged, a negative correlation between the level of information disclosure of corporatesocial responsibility and the cost of equity financing in the late years.The sample of the studyis the year2009-2011listed companies that disclosed Corporate Social ResponsibilityReport.Based on the interests of stakeholders theory, we divide the corporate socialresponsibility into five sections:Environment, employees, consumers, shareholders, and otherstakeholders,and with the use of the index we build a corporate social responsibilityinformation disclosure indicator.As regard to the cost of equity financing, we choose theeconomic growth (OJN) to measure it. By control the five variables like firm size, profitability,Beta, financial leverage, and asset turnover, the study found assumption2has been demonstrated while assumption1has not been proved，that is corporate social responsibilityinformation disclosure is positively correlated with the cost of equity financing in the currentperiod,while it is negatively correlated with the cost of equity financing in the lag period. Also,except the firm size, the control variables like corporate profitability, Beta, financial leverageand asset turnover are consistent with the hypotheses, that is, firm size, profitability, Beta, andcorporate financial leverage and corporate equity financing cost are positively correlated withequity financing cost,while enterprise asset turnover and corporate equity financing cost isnegatively correlated.In the end,in accordance with the conclusions,this paper put forward anumber of policy recommendations from Financial institutions, listed companies and thesecurities market’s angle, and pick out the deficiency and puts forward the prospect.