"Care Or Not "and Contagion Effect

In recent years, we can find many food safety incidents in front-page headlines.It has become a global hot topic what to eat most safety. Food safety is not only related to people’s most basic rights, also related to social stability and economic development. Therefore, all of countries pay great attention to it. On November 19,2012, the outbreak of the Plasticizer Event made the enterprise social responsibility once again become the focus of public opinion.We examine market contagion effects caused by ignoring social responsibility with Plasticizer Event in 2012 in the background. This article selects 42 listed companies with the same independent directors and 46 listed companies with the same auditors of liquor companies. Firstly, we use Event Study to estimate abnormal returns of this companies. This research starts by Plasticizer Event exposed in November 19,2012. It takes 4 days to 15 days before the event as Estimate Window,3 days prior to the event to 3 days after the event as Event Window. Event study results show that individual effect of the same independent director and the same auditor enterprises is not significant, but the overall effect significantly. Suggesting that only few enterprise investors pay attention to the supervision of independent directors and auditors. As Plasticizer Event occurs, they will blame supervisors, but most investors do not focus on supervisors. But from infected whole enterprise, the enterprise is effected by Plasticizer Event more or less. This suggesting the whole market is focused on the role and status of the enterprise supervisors. Plasticizer Event for the same independent director and the same auditor enterprises as a whole have a contagion effect. Secondly, we use the regression analysis examine the effect of independent directors’financial background, leverage, internal control and ROE on abnormal returns. The results indicate that if a company with the independent directors having financial background, the leverage on the low side, perfect the internal control and high ROE, will increase the ability to resist risks of enterprises, makes the Plasticizer Event occurs from or decrease amplitude by contagion effects.Finally according to the result of empirical analysis, it provides relevant recommendations for companies and relevant government departments.