Voluntary Disclosure And The Cost Of Equity Capital:the Reason Of Corporate Social Responsibility Reporting

Being as a "large resident", the enterprise has to fulfill social responsibility to compensate and feedback the extorting from environment. However, lots of facts prove that enterprises frequently lack social responsibility. It’s necessary to take steps to impel enterprises to take responsibility. Canonical social responsibility (CSR) report is one of important tools to supervise and audit the CSR degree performance of enterprise, which shows the aim to encourage enterprise to announce CSR report is to really fulfill social responsibility. However, do we achieve our aim? And what degree we achieve? What is the real motive of announcing CSR report? Those questions are worthy of our attention.In this paper, starting from the view of announcing under the information asymmetry conditions, and combining with the content of society responsibility information, the motivation of cost of equity capital of enterprises’announcing CSR was discussed, and the influence of CSR to capital cost was also further analyzed.First of all, adopting residual income discounted model and income discounted model to calculate the cost of equity capital, it was found that the enterprises with higher capital cost in the past year were more inclined to announcing CSR report voluntarily in the next year, and the cost of equity capital was the main motivation of announcing society responsibility of enterprise. Secondly, after the first announcement of social responsibility report, the capital cost of companies decreased not remarkably, which showed only announcing the social responsibility was not an effect way to reduce the cost of capital. Thirdly, because the influence of society responsibility report to the cost of equity capital was not verified, society responsibility report based on the excellent performance of society responsibility could remarkably reduce the capital cost of listed companies.Based on the results of empirical research, two conclusions were obtained:first, supervision department should supervise the negative information of society responsibility more strictly when they established policies; secondly, when announcing society responsibility report, listed companies should fulfill the CSR truly, only by which the corporation could be accepted by the investors.