Social Responsibility Disclosure And Financial Constraint

Since March2006, State grid corporation of china issued the first corporate socialresponsibility report, in order to encourage listed company disclosure social responsibilityreport when they disclosure the annual financial report, Shenzhen Stock Exchange disclosureListed company social responsibility guidelines. Social responsibility reports began to enterthe Chinese enterprises’ vision. State, enterprises, investors and other stakeholders pay closeattention to this important part of information enterprise disclosure. Cash flow is the source ofthe life of the enterprise. Therefore, how to finance and how to alleviate the financingconstraints of enterprises have always been difficult problems for the enterprise. To besuccessful financing, the enterprise must possess certain qualifications. The method to judgethe qualification is the enterprise information transparency and the quality of information.Good information disclosure environment could relieve financing constraints of enterprise. Sowhat social responsibility report will bring to the enterprise on financing constraints?The principal idea of this article is provide some proofs for hypothesis forward. First, inthe annual report, companies who publish CSR will have less finance constraint than thosenot, so issue CSR will alleviate its finance constraint. Second, CSR in high quality could winmore benefits in decreasing finance constraint. Finally, with such a special economic system,compared with private enterprises, social responsibility report of state-owned enterprises haveless relief on financing constraints in great.The first part is theoretical basis for the second part of the empirical research. In theempirical research, sample selection is based on three considerations, firstly, the informationdata is available and complete; secondly, Considered the distribution and quality ofcorporation social responsibility report; thirdly, the capital market. So we choose Shanghaiand Shenzhen listed companies as empirical research objects and we choose2009-2012as thetime window. By analyzing, we believe that corporate social responsibility report as a newmember of the information disclosure system has had a positive effect on corporate financingconstrains. CSR has now becomes an important factor in making investment decisions. So, asthe higher requirement for information transparency, corporate social responsibility reportwill find its place. At the same time we need to point out that current marketing level is not high, state-owned enterprises seriously rely on government, to some extent it hindered theefficiency of information disclosure.