A Research On The Relationship Between Corporate Social Responsibility And Financial Constraints

In the process of economy transition,Chinese economys is faced with the requirement of both “quality” and “quantitiy”. Corporate social responsibility is hot and supported by the public, as a measure to realize the green economys.At the same time,Chinese capital market is in the period of relative lag and slowness, and as a relust, corporations are facing financing problems, as a whole. In addition, the special term accelerates the Chinese economy’ change to marketization, and in consequence, product market competition is more heavily. Based on the time backgroud, this paper researches relationship among CSR, capital restrants and product market competition. First of all, this paper uses questionnaire survey and the method of content analysis to study the recent condition of Chinese CSR and discovers some phenomena and questions from the aspects of CSR reports disclosure and CSR implementation.As regards to disclosure, we found some questions, disclosure being quietly various because of the lack of widely accepted standards; the disclosure focusing on little things because of the executive focusing on just small parts of CSR; invalid content being too more and the single form to take responsibility. About the implementation, corporations provides a little to the charity organization; corporations lack integrity. Moreover, after reviewing literature and analyzing theories, we find that, CSR implementation can construt a contract with stakeholders,which could reduce the information asymmetry between corporations and stakeholders, so that it is able to relieve financing constraints. After further analysis to CSR, none of CSR dimensons can relieve financing constraints, separately, and the result is that, only comprehensive CSR implementation can do it. What the product market competition does to implicit contracts, is the same as what the law does to explicit contracts, and the protection makes the contracts more stable. When product market competition is more heavily, the dimensons of environment and employee will do better to relieve financing constraints. The innovation of this paper lies in researching the relationship between CSR and financing constraints affected by product market competition, while most papers paying attention to society-level and enterprise-level. Through empirical research,we find that, CSR implementation can relieve financing constraints; the fierce product market competition can strengthen the effect that CSR implementation relieves financing constraints. At last, this paper provides some measures for corporations to fulfill their social responsibilities so as to relieve financing constraints. Suggestions for corporations: Make more advertisements to help more employees to know the CSR better and promote the construction of the CSR strategy; Accelerate the speed of the construction of CSR evaluation system to help corporations to comply it; Create more interactive communication between corporations and stakeholders. Advices for government: Cut back government intervention to propel the development of free market economy; introduce the third party agency to check the reports to make the public easier to accept what it had described; removing the roadblocks to protect the CSR implement; Make the relevant law perfect and making the law better to instruct corporations.