Empirical Research On Relationship Between The Cost Of Equity Capital And Information Discloure Of Corporate Social Responsibility

Under the background of the economic globalization, sustainable development strategy has already touched people’s heart. Not only do people need to pay an attention to the enterprise’s profit, but also more and more focus on corperate social responsibility. Since the enterprise undertakes the social responsibility, it should fulfill the obligation of information disclosure, which is based on the demand of modern enterprise organization theory. We know that financial information has always been an important information disclosure area valued by enterprise, in order to reduce the cost of capital, the enterprise will fully disclose financial information, reduce the asymmetry of information, increase the transparency of information, thus to achieve specific objectives of the enterprise. In today’s increasingly perfect enterprise system, information disclosure on social responsibility gradually plays a role similar to that of the financial information disclosure----- full disclosure of information reduces equity capital cost. But the information disclosure of social responsibility and financial disclosure is different, because it is selective, voluntary and low standardization. So, in this case if the relationship between the information disclosure of social responsibility and equity capital cost is in accordance with the relationship between the financial disclosure and equity capital cost? In order to encourage enterprises to actively undertake corporate social responsibility, we should correctly understand the relationship between the information disclosure of social responsibility and the cost of financing, the correct understanding of the influencing factors and motivation of social responsibility information disclosure, so as to improve the level of social responsibility information disclosure and quality, and promote the sustainable development of economy and society.This article mainly talk about the relationship between information disclosure of corporate social responsibility and the cost of equity capital to analyze the research, trying to reveal the influence of the social responsibility information disclosure to enterprise financing costs. We used the Shanghai stock exchange listed industrial enterprises as the research object, selected from 2009 to 2011, three years of financial data as the research sample. Through the empirical study we found that the more the social responsibility of information disclosure that enterprise for its fulfillment, the higher the information transparency, the easier it is to raise money——the corporate social responsibility information disclosure is negatively correlated with the cost of equity capital. This is because the enterprise who is inclined to disclose their social responsibility can improve their corporate reputation and image, and investors prefer to invest in companies with good corporate image, which makes the cost of equity capital relatively lower to the enterprise who don’t disclose the information of social responsibility information.Characteristics and the possible innovations of this article lies in the fact that, in the existing research, the measurement of social responsibility information disclosure index has always been a difficulty, we usually adopt a third party’s survey of information disclosure ranking(score) such as intermediary institutions and research institutions, or some scholars established an information disclosure scale as an alternative measure of quality. And this paper uses the index of social contribution value to measure the quality of social responsibility information disclosure, its calculation method is according to the release of the annual report of listed companies related data index, which is more objective and reliable. This concept is first put forward in 2008, the company can disclose the social contribution value per share in annual social responsibility report. On the basis of the company created basic earnings per share for shareholders, increase the taxes created by company, the wages paid to employees, the interest borrowed from banks and other creditors and company’s donations, which is created for other stakeholders, and deduct other social cost caused by environmental pollution.