Influence Of The Quality Of Corporate Social Responsibility On The Analysts' Earnings Forecasts

The increasing needs of information and limitations of financial reports lead that users are increasingly concerned about the social CSR information. The analysts play an important role in market. Their work has become one of the important information for decision-makers judgment. Analysts' earnings forecasts require high quality information as the basis for prediction. The CSR information value has been recognized widely. So how CSR information affects analysts' earnings forecasts? In 2008 the Shanghai and Shenzhen exchanges require part of companies issued a separate CSR report compulsorily. So weather the mandatory CSR information can more effectively reduce the earnings forecast errors? This paper focused on the relationship between the quality of CSR information and analysts'earnings forecasts.Based on social contract, effective market, information asymmetry and signal transmission theoretical basis, we selected A-share listed companies that issued CSR report from 2009 to 2014 as the study sample. The purpose of this study is to test how CSR information affects analyst earnings forecast. We found that the better quality of the CSR information, the higher accuracy of analyst earnings forecast. We noted that analysts can predict Stakeholders' possible behavioral responses by reading CSR report. Stakeholders' behavioral responses will directly affect the company's future profits. So analysts can forecast corporate earnings trends and changes in amplitude. Meanwhile we found that the quality of CSR reports can improve analysts earnings forecast consistency. In addition, CSR reports were further divided into mandatory reports and voluntary reports. Compared with voluntary disclosure, mandatory is more significant on lowering analysts earnings forecast errors. The empirical results showed that the CSR information can significantly affect the analysts' forecasts. And the two disclosure types have different influence.Finally, in order to improve the quality of CSR information and enhance analysts' absorption ability to use CSR information, we recommend strategies from the system construction, government, attestation engagements agencies, analysts and other aspects.