Type Of Ultimate Controller,Social Responsibility Performance And Cost Of Equity Capital

In 2018,the Central Economic Work Conference mentioned the problem of corporate financing difficulties and proposed the goal of increasing the proportion of direct financing.Under the realistic background of China’s equity financing preference,how to reduce the cost of equity capital is of great significance to the survival and development of enterprises.Throughout the existing equity financing theory,most of the focus on the financial characteristics of the enterprise,the internal and external governance environment and other formal systems on the impact of equity capital costs,and corporate financing activities will also be affected by other stakeholders in the social environment.Therefore,this paper introduces the informal system of corporate social responsibility performance in the study of the cost of equity capital.Good social responsibility performance can help alleviate the information asymmetry inside and outside the enterprise,reduce the heterogeneity risk of the enterprise,and play a positive role in the equity financing of the enterprise.At the same time,taking into account China’s special economic system,the ability of state-owned holding companies and non-state-owned holding companies to obtain resources is different,and the phenomenon that equity is generally controlled by the ultimate controlling shareholders is widespread.Based on this,this paper takes the social responsibility performance as the explanatory variable from the micro perspective of the cost of equity capital.This paper also empirically tests whether and how the social responsibility performance affects the cost of equity capital.What’s more,under the different ultimate controllers,there is a difference between the social responsibility performance and the cost of equity capital.This paper bases on the A share listed companies except financial industry of Shanghai and Shenzhen stock exchange from 2010 to 2014.Combining the nature of the ultimate controller,this paper examines the relationship between the social responsibility performance and the cost of equity capital and the path of action.The study finds that(1)Social responsibility performance has a positive corporate governance effect.Social responsibility performance is negatively correlated with the cost of equity capital,and the relationship between the two is more significant in the ultimate control of the state-owned enterprise.(2)Social responsibility performance can affect the cost of equity capital by mitigating information asymmetry and reducing heterogeneity risk,and the proportion of information asymmetric mediation effect is slightly larger.(3)The nature of ultimate property rights has a different impact on the conduction path of social responsibility performance affecting the cost of equity capita.Among the state-owned ultimate holding companies,the mediation variable that social responsibility performance affects the cost of equity capital is the information asymmetry rather than the heterogeneity risk.In the non-state-owned ultimate holding companies,the role of mediating is heterogeneous risk rather than information asymmetry.This paper theoretically analyzes the impact of social responsibility performance on the cost of equity capital and its role,and uses the financial data of listed companies to verify the value effect of corporate social responsibility from the empirical aspect.In addition,the research conclusions of this paper prove that there are differences in the path of social responsibility performance to the cost of equity capital in enterprises with different nature of ultimate control.According to the differentiated influence of the nature of property rights,it provides relevant recommendations for relevant departments to formulate policy guidelines,and provides useful reference for enterprises to improve corporate governance mechanisms.