Corporate Social Responsibility,Debt Financing And Inefficient Investment

As the impact of economic development on natural resources and environment continues to deepen,the public is paying more and more attention to the social performance of enterprises in addition to their economic benefits.In order to promote the sustainable development of social economy and the construction of a harmonious society,the government advocates that enterprises consciously combine business development with long-term social benefits.Many firms take the initiative to assume social responsibilities.Corporate social responsibility(CSR)is gradually integrated into many aspects of the company's daily business decisions.Financing and investment,two closely related activities,are among the most important corporate financial decisions.Inefficient investment problems however,remain prevalent among listed companies.One of the main causes is the agent conflict between company owners and managers as well as managers' self-centered tendency.Is there any improvement in the investment efficiency for the listed companies engaged in CSR compared to those which have not fulfilled their social responsibilities?Are the interests of the creditors secured through improving the using efficiency of debt capital?Based on the data of the Chinese listed companies from 2009 to 2017,the empirical research is conducted to discuss respectively the impact of debt financing and CSR on the non-efficiency investment of enterprises,and to explore whether the relationship between debt financing and non-efficiency investment is mitigated in the context of CSR.The result shows that debt financing is significantly positive to inefficient investment.Firms engaged in CSR have lower level of inefficient investment.And the relationship between debt financing and inefficient investment is mediated negatively by CSR involvement,but this effect is only prominent in the scenarios of under-investment.It suggests that the governance effect of corporate social responsibility is still weak.More needs to be done so as to promote enterprises to optimize the level of capital utilization,improve investment efficiency,and protect the interests of creditors.This paper expands the research perspective of CSR.It helps stakeholders to understand the relationship between debt financing and corporate investment behavior,providing empirical evidence for improving debt contracts and strengthening supervision of borrowing enterprises.And it deepens the understanding of the impacts of companies involving in CSR on business development activities so as to enhance the companies' social responsibility awareness and fully integrate CSR into their core business activities and long-term development strategies to achieve healthy development in the long run.