Corporate Governance And Spillover Effects Of Corporate Social Responsibility Events

In recent years,from the Sanlu milk powder melamine incident in 2008,the Shuanghui Clenbuterol incident in 2011,the alcoholic alcohol plasticizer incident in 2012,and the Changsheng Biotechnology vaccine fraud incident in 2018,social responsibility scandals caused by enterprises' failure to fulfill their social responsibilities have occurred frequently in the market.The occurrence of corporate social responsibility events will not only bring negative effects to the enterprises themselves,but also produce spillover effects to the enterprises in the same industry.For the spillover effect,it can be divided into the "contagion effect" caused by the event and the "competition effect" caused by the event.So,when a social responsibility event occurs in an enterprise,how does the spillover effect on the same enterprise come into being? What factors affect this spillover effect?This paper starts from the vaccine fraud incident of Changsheng Biotechnology in 2018,and studies the spillover effects of corporate governance and corporate social responsibility events based on the principal-agent theory,the effective capital market theory,and the accessible diagnosability theory.Firstly,the economic consequences of vaccine events on Changsheng Biotechnology and spillover effects on companies in the same industry were measured using the event research method.The date of the Changsheng Biotechnology vaccine counterfeit announcement issued by the State Food and Drug Administration is July 15,2018 as the event day,and the event window is 10 trading days before the event day to 10 trading days after the event day.Select 100 transactions before the 2018 event period day as the estimation window.The results of the event research method show that the immortality of Changsheng Biotechnology vaccine has indeed caused spillover effects on companies in the same industry,and this spillover effect is reflected as "contagious effect".The strength of the contagion effect also varies from company to company.Next,the text analysis is used to obtain investor sentiment changes before and after the event.Investor sentiment will affect investors' investment behavior.Among the companies in the same industry,the stronger the negative investor sentiment,the lower the CAR,and the more obvious the spillover effect.Then,the NVivo 11.0 qualitative analysis software was used to code and analyze the content of the stock reviews of Changsheng Biological and Kangtai Biological,Zhifei Biological and Watson Biological in the same industry,combined with the accessibility and diagnosability theory to explain the spillover effect.The reasons and the role of corporate governance were analyzed,and the mechanism of corporate governance's impact on corporate social responsibility incident spillover effects was analyzed.The comparative analysis of the corporate governance of the four companies was conducted to confirm the conclusions of the event research method and the code analysis.Through data analysis,this article has reached the following conclusions: First,corporate social responsibility events not only have a negative impact on the company itself,but also have spillover effects on companies in the same industry.Second,the transmission mechanism of corporate governance's impact on spillover effects is "investors' perception of social responsibility incidents-analysis of the causes of incidents-attributive corporate governance-comparison with companies in the same industry-similar corporate governance-spillovers".Third,the more similar corporate governance is between different companies,the more obvious the spillover effects of corporate social responsibility events.According to the conclusions of this article,the following management suggestions are proposed:First of all,companies should always pay attention to social responsibility events generated by companies in the same industry.Once a social responsibility event occurs,companies in the same industry should respond to the event in a timely manner and maintain communication with investors through information disclosure and other methods.If it is found that the enterprise itself also has a crisis of social responsibility,it should promptly take precautions through positive methods such as recall or shutdown,and apologize publicly.If the company finds that it does not have similar risks to the company that caused the incident,the company should also disclose this information in a timely manner to reduce the degree of investor connection between the company and the company,and to avoid investors who are excited about the incident Connect with the company to minimize the negative impact of the scandal on the company.Second,companies should gradually improve their corporate governance in their daily operations.Perfect corporate governance can not only ensure that the company's behavior is based on the maximization of corporate value and achieve longterm development.It can also reduce the chance of corporate social responsibility incidents.