Research On The Insurance-like Effect From The Corporate Social Responsibility Performance To Wealth Of Shareholders

In recent years, corporate social responsibility(CSR) has become concerned about the hot academia and industry, the economic consequences of corporate social responsibility to become the new focus of academic research. This paper from the negative events perspective, discuss the economic consequences of corporate social responsibility, analyze the relationship between CSR and shareholder wealth, probe CSR performance on shareholder wealth insurance-like effect mechanism in the context of a negative event.This paper selects 2010-2013 of Chinese listed company data, select each dimension of social responsibility indicators, then we use the factor analysis method to obtain a sample for each of the listed company’s corporate social responsibility ratings as a measure of corporate social responsibility indicators. At the same time, by manually searching full-text database of China’s major newspapers we obtained 459 samples of negative events in 2011-2014, using the event study method to obtain each sample event cumulative abnormal returns(CAR) as a measure of shareholder wealth. Based on the Resource-based View(RBV) and the efficient market hypothesis(EMH), using regression analysis to empirical theory. Findings showed that:First, in the context of a negative event, the decline in shareholder wealth is smaller for firms that engage in CSR activities than for firms that better performance on social responsibility. Meanwhile, consider the factors affecting the insurance-like effect, we believe the firms that larger firms, higher levels of intangible assets, companies in a non-stigmatizing industry, national holdings, the insurance-like effect is better.Secondly, we believe that corporate social responsibility with the "diminishing marginal insurance-like effect", the insurance-like effect of corporate social responsibility performance is increases with the number of negative events gradually decreased.Finally, the classification of negative events, we believe insurance-like effect only in the stakeholder-based negative events and integrity-based negative events, will play its insurance-like effect. But in the competitively-based related negative events, the shareholder wealth-loss is unrelated to engagement in CSR activities.From the conclusions of this paper, good CSR performance can effectively reduce business risk faced, in the context of a negative event, reduce the shareholder wealth-loss. From this perspective, the corporate to actively engage their corporate social responsibilities is not contrary to and the goal or “maximizing shareholder wealth,” is complementary relationship. This provide a theoretical basis for Chinese enterprises to actively engage its corporate social responsibility, to change Chinese enterprises generally lack the status quo CSR motivation has profound practical significance.