Corporate Social Responsibility And The Value Of Cash Holdings

The pursuit of building a harmonious society and sustainable economic development asks all social classes to undertake more social responsibility thus improving the social benefits when achieving the economic benefits. Therefore, when making effort to build a sound capital market and promote economic development, our country requires enterprises to pay more attention on environment protection, energy conservation and emission reduction and product quality, etc.As an important member of social economy, listed companies play a significant role in the pursuit of social benefits. Though there are certain theoretical and empirical researches on the relationship between listed companies’social responsibility and the value of cash holdings, but no consistent result is made. Cash holding is an important part of listed companies’asset, whose value reveals a significant aspect of enterprise value. Does the social responsibility performance of listed companies have an effect on the value of cash holdings? If there is some influence, then how does the social responsibility performance of listed companies influence the cash holding value? Previous literatures seldom research on the topic.The main research methods are theoretical analysis and empirical research. First, we review the literatures about the corporate social responsibility、corporate value and the value of cash holdings. Secondly, in the framework of stakeholder theory, based on asymmetric information theory, agency theory and transaction cost theory etc., this paper theoretically analyses the relationship between the social responsibility and the value of cash. Then, based on the theoretically analyses, we propose our hypothesis. The empirical result obtains negative regulation of corporate social responsibility and the value of corporate cash holdings, showing poor awareness and a low level of corporate social responsibility and a high level of cash holdings of Chinese listed companies. There is a negative regulation of corporate social responsibility and the value of cash holdings in our country. The awareness of corporate social responsibility urges to be improved.