Research On The Effect Of Corporate Social Responsibility On The Cost Of Bank Loans

With the public attention to the problems of environmental pollution and social interests in recent years, corporate social responsibility has risen to a strategic height, which concerning sustainable development of corporations. Researches on this area have been concentrated on the influence factors of corporate social responsibility disclosure and its economic consequences, especially the latter topic has been expanding. In 2007 and 2012, the CBRC, the Environmental Protection Bureau and the Central Bank introduced the GREEN CREDIT POLICY, which required all commercial banks pay high attention to the environmental and social performances of enterprises when evaluating credit risks. Therefore it's of great importance to study the relationship between corporate social responsibility disclosure and the cost of bank loans in this context, which also provided empirical evidence about the relationship between social responsibility and corporate value.Using the listed companies, which disclose social responsibility report from A-Share in the period of 2010-2013 as research samples, we examine the relationship between corporate social responsibility (CSR) and the cost of bank debt (COD) in China on the basis of information asymmetry theory, signal transmission theory, stakeholder theory and reputation theory. We find that ceteris paribus, compared with listed companies which do not disclosure corporate social responsibility, those that do enjoy a lower COD; For listed companies that disclosure CSR, with the increasing score of CSR, the COD will first increase when CSR is lower than a critical value, then decrease significantly when the disclosure of CSR exceeds the critical value, demonstrating a reversed U-shape relationship between CSR and COD; Considering the property right of enterprises, we find that the reversed U-shape relationship between CSR and COD exists in both state-owned companies and private companies, and private companies' critical value is higher than state-owned companies; Furthermore, we differentiate the owner's equity of firms in distinct market level, the result shows that in the higher market, the reversed U-shape relationship between CSR and COD exists in state-owned companies and private companies, and private companies'critical value is higher; but in the lower market, the reversed U-shape relationship between CSR and COD only exists in state-owned companies.According to the results of empirical research, two main policies are put forward under the context of green credit policy:improving corporate social disclosure mechanism and propelling reform for the liberalization of loan rates. It proposes that enterprise, especial private enterprises who bear high loan rates can signal their good reputation to commercial banks through strategic corporate social responsibility, acquiring a lower cost of bank loans.