Economic Impact Of Corporate Social Responsibility

Along with the development and progress of society, the externality of the enterprise is becoming more and more prominent. In addition to its own development, the enterprise undertake much more social responsibility than before, mainly manifested in two aspects:first, with the information transmission medium like internet, the transmission of information become faster and more convenient, so that the public and enterprise stakeholders pay more attention to the corporate social responsibility; second, the relevant regulatory authorities also issued a lot of guidance opinions to encourage enterprises to undertake the social responsibility and disclosure their social responsibility reports. As the first corporate social responsibility report was disclosed in 2001, about 600 listed companies issued more than 1500 social responsibility report by the end of 2014. The number of corporate social responsibility report showed a rapid growth trend over the years. It also reflects that enterprise and society pay more and more attention to the fulfillment of corporate social responsibility.Based on the related literature, we found the study of corporate social responsibility domestic and overseas is mainly about the financial performance, the value of the company, the cost of financing, market performance, brand value, customer loyalty, innovation, spillover effects of reputation, etc. Most scholars think the corporate social responsibility has a positive effect on the economic development of the enterprise. And many scholars used the empirical method to prove the influence of corporate social responsibility. Most research on corporate social responsibility was about its economic effect on financial performance and the value of the company. The research about its effect on corporate financing costs is limited; and its content is mainly about the cost of equity financing or the cost of debt financing for one kind of enterprises. Research about the effect of corporate social responsibility for the tax burden is little, and discusses mainly from the perspective of tax avoidance. Based on the above issues, this paper chose the innovative perspective of financing costs and tax burden to research the economic impact of corporate social responsibility for the enterprise. This research can be a supplement for the existing literature research.In view of the influence of corporate social responsibility for enterprise financing cost and for the tax burden, this article puts forward the following questions:first, if the corporate social responsibility can influence its financing costs and tax burden significantly? Second, if this kind of influence is subsistent, how can corporate social responsibility influence the financing cost and tax burden? Does it have positive effect or negative effect? Third, how does corporate social responsibility influence the two kinds of financing cost, the cost of debt financing and the costs of equity financing? Four, through the study on the influence of corporate social responsibility for the cost of financing and the influence of the tax burden, what kind of enlightenment can the enterprise get to fulfill the future of social responsibility, and what kind of enlightenment can the stakeholders of the enterprise get? This paper used the relevant data to carry on the empirical analysis of listed companies, hoping to get the answers to these questions and find the influence effect of social responsibility to enterprise financing costs and tax burden, so that people can get some enlightenment from the result.In order to do the research of this paper, we use theoretical study, literature research and empirical approach to study and discussion. First of all, this article summarized the related theory and hierarchical analysis model of corporate social responsibility, so that we can have a deeper understanding for corporate social responsibility. Then, this paper compiled the related research literature on the economic impact of corporate social responsibility for enterprises, including the company's financial performance, the value of the company, the cost of financing, tax burden, the innovation behavior and so on. All these aspects are closely related to the production and operation of the enterprise. From these research can reflect the importance of corporate social responsibility for the enterprise and society. Then this paper used the relevant data of listed companies to establish the empirical model about the influence of corporate social responsibility for corporate debt financing costs, equity financing cost and tax burden, and to study the influence of corporate social responsibility for enterprises effect and its mechanism.In order to study the influence of corporate social responsibility for enterprise financing cost and the influence of the tax burden, this paper chose the a-share listed companies in the Shanghai and Shenzhen stock exchange in 2008-2014 as the research object. And through the screening of certain conditions, the 2376 groups of data from 510 companies were included as research samples in this paper. Then, according to some literature reference by other scholars, this paper selected its variables:the financing cost was divided into the cost of debt financing and the cost of iniquity financing these two explained variable; about the tax burden, corporate tax rate was selected as the explained variable in the study; as for corporate social responsibility, this paper mainly selected enterprise net tax and social donation as the two indicators of the explanatory variables; in addition, this paper selected the enterprise scale, equity concentration, asset-backed ability, debt paying ability, operation ability and risk level as the control variables; then the regression models were established. Later, the CSMAR database and Wind database were used to find the relevant data of the model.This paper chose the a-share listed companies in the Shanghai and Shenzhen stock exchange in 2008-2014 as the research object, and chose the enterprise financing cost and tax burden as its research perspective, used the enterprise net tax and social donation as the measure of corporate social responsibility, to study the influence of corporate social responsibility for debt financing cost, equity financing cost and the tax burden of listed companies. By using STATA data sorting, calculating, regression, and inspection, this paper finally gets the following conclusions:first, in terms of debt financing costs, social donations have positive influence to reduce the cost of debt financing for both state-owned enterprises and private enterprises. Second, when state-owned enterprises pay more tax, its cost of debt financing will be higher; while for the private enterprises, paying more for taxes can effectively reduce the cost of debt financing. Third, more social donation can lower the equity financing cost for private enterprises; while social donations have no obvious direct contribution for state-owned enterprises. Four, paying more taxes can effectively reduce the cost of equity financing for both state-owned enterprises and private enterprises. Five, the social donation has a positive incentive effect for corporate tax rate for both state-owned enterprises and private enterprises; it means the more donations can lead to lighter tax burden. Six, the net tax has the same influence for both state-owned enterprises and private enterprises; the higher net tax leads to the heavier tax rate.This paper is divided into five parts altogether:the first chapter is a brief introduction about the research contents of this paper, including its background, significance, the research methods and the innovation of this paper. The second chapter is mainly about the literature review of corporate social responsibility and its effects for enterprises. The third chapter introduced the model assumptions and the buildup of model, including the data source of the empirical analysis, variable meaning and model specification. Chapter four shows the result and analysis of the empirical model. This chapter includes three parts:the first part is a descriptive analysis of the sample data; the second part is the result of the empirical model, and the third part is the model robustness test and endogenous test. The fifth chapter is the conclusion and prospect of this article; also the deficiency and subsequent research direction of this article were put forward in this chapter.The innovation of this article includes the following three aspects:first, the innovation of research perspective. Different from the past literature which based on the financial performance, the value of the company or the brand image, this article chose two innovation research perspectives including financing cost and tax burden to study the influence of corporate social responsibility. And the costs of debt financing and the cost of equity financing were discussed respectively in this paper. The second innovation is about the model. The model of this article combined with the former research literature which was based on the impact of corporate social responsibility for the costs of debt financing or the costs of equity financing, or the tax burden, and two original explanatory variables and more control variables were design into the model. Third, the database is innovative. Different from using CSR rating data on the social responsibility of Run Ling global enterprises directly, this paper used the social responsibility database of Chinese listed companies in CSMAR database, including the data of total tax, social donations and social contribution value per share.This article has the following several insufficient:first, the limited samples and data. Because at present our country has not established a perfect system for the information corporate social responsibility to disclosure, so we can collect the comprehensive and complete data for the research. Second, the capital asset pricing model was used to calculate the cost of equity financing. But there are many strict assumptions to use the capital asset pricing model. Failing to fully meet the assumptions may cause the error of calculation results. Three, this article selected the net tax and donation as the measure of corporate social responsibility, but many other indexes of corporate social responsibility were not taken into account.