Research On The Influence Of Corporate Social Responsibility Performance Of Listed Companies On Corporate Violation Of Laws And Regulations

In recent years,the Government Work Reports have repeatedly mentioned encouraging enterprises to practice social responsibility.New requirements and directions have been put forward for enterprises to realizing sustainable development.Also,corporate social responsibility has attracted more attention and concern from all walks of life.The number of corporate social responsibility reports issued by Chinese companies has been increasing year by year,from 32 in 2006 to 2030 in 2019.What economic consequences and social impacts corporate social responsibility will bring have aroused widespread social debate.At the same time,China’s A-share market has continuously appeared listed companies’ fund occupation,illegal guarantee,financial fraud and other behaviors,which seriously affect the image and benefits of enterprises,destroy the order of the market,and do harm to the sustainable and healthy development of China’s securities market.Corporate social responsibility performance,as a non-financial indicator,can objectively and justly reflect the business situation of an enterprise to stakeholders to a certain extent,increase corporate transparency,reduce information asymmetry,and play an effective signal role.At present,no consensus has been reached on the research conclusions of the impact of CSR(Corporate Social Responsibility)performance on corporate violations of laws and regulations.Some scholars at home and abroad believe that CSR is a ”shield” and a ”FIG leaf” for companies to engage in illegal activities from the perspective of principal-agent.Other scholars believe that CSR can reduce information asymmetry and enhance the ”signal function” to external supervisors.Based on stakeholder theory,signal transmission theory,principal-agent theory,information asymmetry theory and other related theories,this paper explores the impact of corporate social responsibility performance on corporate violations of laws and regulations.At the same time,in view of the difference between the impact of corporate social responsibility on the company’s disclosure of violations and actual violations,as well as the impact of other factors on the effect of corporate social responsibility,this paper also carries out further research and explanation.This paper,by using 2010-2019 China corporate social responsibility data from a third party agencies,combed the stakeholder theory,signaling theory,principal-agent theory and information asymmetry theory and other related theoretical basis with relevant literature both at home and abroad,empirically test of corporate social responsibility performance on the impact of corporate illegal behavior.Also,from two angles of internal management and external supervision,this paper discusses five possible transmission mechanisms and channels,such as internal agency cost,controlling shareholder’s share of capital,company’s internal control level,analyst’s attention and institutional investor’s supervision.Moreover,the paper further analyzes the influence of corporate social responsibility performance on companies’ violation of laws and regulations in different levels of marketization and trust level in different regions.The research findings show that:(1)The CSR performance of Chinese listed companies is significantly negatively correlated with the company’s violation of laws and regulations,which is the better the CSR performance,the lower the company’s violation tendency;After a series of robustness tests and endogeneic tests,such as adding some variables changing model methods,subsample regression,and instrumental variable methods,the above conclusions are still valid.(2)Further analysis found that the mechanism of corporate social responsibility can reduce the violation through two aspects of internal governance and external supervision,The specific path is to reduce the internal agent cost,reduce capital occupation by controlling shareholders,improve the level of internal control,increase analyst focus and attract supervision from institutional investors;(3)The higher the degree of marketization,the more obvious the inhibition effect of CSR on the violation of corporate rules.However,the impact of different levels of social trust is not obvious.In short,through the analysis of different situations,the results show that corporate social responsibility performance can effectively restrain the tendency of companies to violate laws and regulations,and reduce the illegal behavior of enterprises.