Research On Corporate Social Responsibility Report And Cost Of Equity Capital

Few standalone corporate social responsibility(CSR)reports were issued in the United States before the mid-1990s,the last 10 years more and more companies start to issue CSR reports,and third parties like KLD often track and rate the CSR performance of large firms.State power Grid Company issue the first standalone CSR report in 2006,and the number of firms publish standalone CSR in China increased each passing day,in recent year,there have been third party organizations such as the Golden Bee and Ranking CSR Ratings.Based on the backgrounds of Chinese social and economic backgrounds,the dissertation analyzes the relationship between CSR reports and the cost of equity capital from disclosure motivation and economic consequences perspective.Firstly,this study reviews the CSR disclosure motivation and economic consequences literature,than develop the next step research ideas and content.Secondly,this study proposed hypothesis based on CSR disclosure motivation and the relationship between CSR reports and cost of equity capital,we design variables and collect data depend on the research hypothesis.In the end,this study analyzes the relation between CSR reports and cost of equity capital empirically using logistic regression.liner multi-regression.This study provides evidence that a firm first voluntary disclosure its CSR activities is not positively associated with its cost of equity capital in the previous year,a high cost of equity capital in the previous year does not give firms an incentive for CSR disclosure in the current year.CSR disclosure is associated with a subsequently lower cost of equity capital,and cost of equity capital reduced by the quality of reports increased for the firms that disclosure CSR reports.While CSR reports cannot apparently lower cost of equity capital for firms that voluntary disclosure CSR reports.From the perspective of investors,investors do not have a favorable perception if a firm actually performs well in its CSR practices relative to its peers.This study suggests that firms disclosure CSR reports not just need to consider the influence of external drivers but also need the internal drivers,Chinese enterprises should incorporate CSR into their long-term strategy and sustainable development.This paper provide some advices that strengthen and perfect the legal system?establish standard CSR report writing guidelines?develop the third party inspections of CSR reports and enhance consumer awareness of social responsibility,we hope this suggestions help enterprises to enhance the overall quality of the report and voluntary disclosure CSR reports from their inherence demand.