Advances in Social Science, Education and Humanities Research, volume 385

3rd International Conference on Education, Economics and Management Research (ICEEMR 2019)

Corporate Social Responsibility Information

Disclosure Research
Juan Wang * Liping Lin
School of Economics and Management School of Economics and Management
Guangxi University of Science and Technology Guangxi University of Science and Technology
Liuzhou, China Liuzhou, China

Abstract—Since the 1970s, as a long-term concern of the commitment to the social responsibility of all stakeholders is a
academic and practical circles, research on corporate social link that enterprises can't ignore for sustainable development.
responsibility has continued to develop in depth, and a large
number of research results have been obtained. Corporate social The concept of "corporate social responsibility" can be
responsibility can balance the interests of stakeholder groups. traced back to 1924. The British scholar Sheldon made a
The special relationship between the company and the preliminary definition of "corporate social responsibility" in the
stakeholders will affect the motivation, influencing factors and book "Management Philosophy". He believed that in the course
economic consequences of the company's disclosure of social of business, the company can take into account the needs of
responsibility information. This paper combs the literature on various groups of people inside and outside the organization,
the motivation, influencing factors, and economic consequences and has already reflected the social responsibility of the
of social responsibility information disclosure, and proposes new company. Thirty years later, the formal definition of corporate
ideas for corporate social responsibility information disclosure social responsibility was proposed by American scholar Bowen
research based on motivation-influencing factors-economic (1953). In his book "Social Responsibility of Merchants",
consequences. The study found that companies will disclose social Bowen pointed out the social responsibility of businessmen is
responsibility for the purpose of profitability, financing needs the formulation of the execution of business decisions. The
and agency costs, and will ultimately affect the company's capital whole process should consider the goals and values expected
cost and investor decisions. On this basis, future research by society, and further suggest that the decision-making of
prospects for corporate social responsibility information
enterprises based on the recognition of social goals may lead to
disclosure are proposed.
more economic and social benefits. This opened the prelude to
Keywords—corporate social responsibility; disclosure modern research on social responsibility. Since the 1970s,
motivation; influencing factors; economic consequences people's calls for corporate social responsibility have gradually
increased, and some countries and regions have begun to
respond to such calls and translate social responsibility into
I. INTRODUCTION practical actions. More than ten years later, corporate social
With the rapid economic growth, the problems of corporate responsibility reports have gradually been adopted by many
society and the environment have become increasingly large enterprises. The wide application of social responsibility
prominent. The risk of product safety and quality, the loss of standards (ISO26000) and social ethics standards (SA8000) on
employee rights, the waste of resources, environmental a global scale also provides a model for corporate social
pollution, and other corporate non-compliance with social responsibility disclosure.
responsibility have repeatedly become hot issues in society. As
China's economic development enters a new normal, enterprise As a long-term concern of the practical and academic
development gradually moves from the speed of development circles, corporate social responsibility has been continuously
to the quality of development. More and more enterprises are developed in-depth and has achieved a lot of research results.
beginning to pursue the maximization of the comprehensive Based on the combing of related literature, this paper
value of economy, society and environment. By fulfilling their summarizes the relevant research results around the motives,
responsibilities to various stakeholders, enterprises can influencing factors and economic consequences of corporate
promote the organic unification of their economic, social and social responsibility information disclosure. Furthermore, it
environmental values and contribute to the sustainable puts forward the possible research directions and ideas of
development of enterprises. In 2006, “Responsible for Social corporate social responsibility issues in the future.
Responsibility” was officially written into our company law. In
2008, the China Securities Regulatory Commission, the II. THE MOTIVATION FOR DISCLOSURE OF CORPORATE SOCIAL
Shanghai Stock Exchange and the Shenzhen Stock Exchange RESPONSIBILITY INFORMATION
jointly issued a notice requesting listed companies to disclose Motivation refers to the internal causes that directly drive
corporate social responsibility reports. Therefore, regardless of individuals to conduct their activities. Motivation drives
the development of the company itself, or the expectations and individuals to engage in certain behaviors, motivate individuals,
requirements of stakeholders, the company's active and direct individual behavior to act toward specific goals. As a

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 Advances in Social Science, Education and Humanities Research, volume 385

"social citizen", the company’s disclosure of social transmission theory, and show investors that they are
responsibility is also based on certain motives. Based on three responsible social citizens and meet corporate financing needs.
theories, this paper reveals the motives of corporate social
According to the theory of signal transmission, the more
responsibility information disclosure from three different
information a company discloses to the outside, the weaker
perspectives.
information asymmetry between the company and its investors.
It will help investors make more rational decisions. According
A. Motivating improving profitability to Fama and Miller (1972), external financing can compensate
The theory of information asymmetry means that in an for the lack of cash flow in corporate profitability, thereby
incompletely valid market, people's understanding of economic maximizing value and the need for corporate investment
activity information is different: the more adequate the activities. Therefore, companies will voluntarily disclose social
information is the more favorable it is. And the insufficient responsibility information for the sake of financing needs. Zhai
information mastery will put it at a disadvantage. Traditional Huayun(2010) took the manufacturing enterprises as the
classical economic theory holds that people are completely research object and found that with the high quality of social
rational and can grasp all the information about the surrounding responsibility information, the high external financing demand
environment and distinguish them. Because people have the is[2]. It can be seen that one of the motivations for companies
same degree of mastery of information, they can fully use to disclose social responsibility information is achieving
information to configure resources, and then make the market corporate financing needs.
reach Pareto optimal. However, with the development of
society, people gradually realize the existence of information C. Motivating reducing agency cost
asymmetry. In the capital market, the difference in information
With the rapid development of social productivity and the
mastery between company managers and other stakeholders is
gradual expansion of the scale of enterprises, there has been a
typical information asymmetry. Company managers are
responsible for the company's operations and are able to grasp situation in which enterprise ownership and management
rights are separated. The existence of the agency relationship
all the information about the company's operations, while other
internal and external stakeholders only use the information makes it unnecessary for the business owner to personally take
charge of the company's operation and management, which
disclosed by the managers to speculate on the company's real
also makes it impossible for the owner to fully grasp the
situation.
various information of the enterprise. Therefore, business
Vaani Anand (2002), Tiago Melo and Jose Ignacio Glan owners will ask managers to disclose more information to
(2011) believed that corporate social responsibility can enhance them. In order to meet the expectations of the profit
corporate reputation[1]. Schwaiger (2004) believed that maximization of the business owner, the manager will disclose
reputation is a scarce resource for enterprises, and it is not the social responsibility information as much as possible,
imitative. So it can form a strong competitive force. The show the owner that he is a qualified agent, and obtain higher
existence of the theory of information asymmetry allows the compensation. The view of the principal-agent theory is that
company's stakeholders other than management to grasp part of the information asymmetry between the principal and the
the company's information. Therefore, companies with good agent leads to the generation of agency costs. The agent seeks
performance will voluntarily disclose more information to to maximize self-interest, and the principal seeks to maximize
distinguish them from other companies with average the profit of the enterprise.
performance and enhance their corporate image by showing
Forker(1992) pointed out that when the duties of the
themselves that they are good social citizens. Thus gain more
chairman and general manager are one-person, there is a
favor from investors. Stimulate the company's stock price rise
and improve the company's profitability. Therefore, one of the negative impact on the disclosure of social responsibility
information. When the roles of chairman and general manager
motivations for companies to disclose social responsibility
are separated, in order to reduce agency costs, the general
information is improving the company's profitability.
manager will voluntarily disclose more social responsibility
information. It can be seen that reducing agency costs is also
B. Motivating financing needs one of the motivations for companies to disclose social
Nobel Prize-winning economist Michael Spencer responsibility information.
introduced the theory of signal transmission into economics
research. He found that in the market, individuals who have III. FACTORS AFFECTING CORPORATE SOCIAL RESPONSIBILITY
sufficient information to transmit information to individuals
INFORMATION DISCLOSURE
who have a disadvantage in information in order to avoid
problems related to adverse selection. In order to obtain more With regard to the influencing factors of corporate social
limited resources in the capital market, companies with good responsibility information disclosure, the existing empirical
corporate performance will transmit this information to the research mainly analyzes from two angles, one is the external
outside world through information disclosure, thereby environment level of the enterprise, and the other is the internal
attracting investors and achieving the financing goals of the driving force of the enterprise. The external environment of the
company. At the same time, due to the reduction of transaction enterprise includes the national macro environment and
costs, the financing cost of enterprises will also decrease. stakeholders. The internal driving force of the enterprise
Therefore, enterprises will actively disclose social includes establishing the corporate image and strategic
responsibility information after recognizing the role of signal management motivation.

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A. External environment of the enterprise with stakeholders. It can be seen that reputation does affect
The macro-environmental research of enterprises mainly corporate social responsibility information disclosure. Lian
discusses the impact of macro-factors such as law, culture, Chunhui et al. (2016) concluded that reputation positively
politics and economy on the disclosure of corporate social affects information disclosure [3]. Shen Hongtao et al. (2011)
responsibility information. In terms of legal factors, Friedman found that social responsibility performance will also promote
(1970) believed that under market economy conditions, the the improvement of corporate reputation[4]. It can be seen that
primary factor that enterprises consider in their production there is an interactive relationship between reputation and
decisions is how to use their resources to participate in social responsibility information disclosure. In order to
economic activities to increase profits while complying with establish a good corporate image for the outside world,
the law. Patten (1991) and Gray & Vint (1995) believe that enterprises will actively disclose social responsibility
compliance with information disclosure regulations is one of information.
the main motivations for enterprises to disclose social Beginning in the late 1990s, some management scientists
responsibility information. From the legal point of view, the combined corporate strategic management theory with
supervision and legislation of social responsibility information corporate social responsibility issues. Porter et al. (2006), a
disclosure guarantee the truthful disclosure of corporate social famous competitive strategist at Harvard University, believed
responsibility information. Hope (2003) studied the influence that companies can gain a competitive advantage by taking
of cultural factors such as rights level concept and investor risk social responsibility. Therefore, the motivation of a company
aversion on the level of corporate information disclosure and to conduct strategic management may affect the disclosure of
found that law is not a substitute for culture in factors that its social responsibility information.
affect corporate disclosure. With the information environment
rich, the influence of legal system factors on the company's
disclosure level is weakening. Haniffa & Cooke (2005) IV. THE ECONOMIC RESULTS OF CORPORATE SOCIAL
RESPONSIBILITY INFORMATION DISCLOSURE
conducted a study on the impact of cultural and governance
factors on corporate social responsibility disclosure in Malaysia With regard to the study of the economic consequences of
by issuing questionnaires to corporate managers. corporate social responsibility information disclosure, the
existing empirical research mainly focuses on two capital
Research on the influencing factors of corporate market effects, the impact on the company's capital cost and
stakeholders. Ultmann (1985) proposed that the role, content, investor decision-making value.
and evaluation of social responsibility reports should be
analyzed in the context of political interests and conflicts. By
applying the theory of stakeholders to the prediction and A. The impact on capital costs
interpretation of corporate social responsibility activities and A study by foreign scholar Anderson & Frankle (1980)
their information disclosure behaviors, a comprehensive and showed that disclosure of social responsibility information can
complete social responsibility theory framework model is affect stock prices and transfer market signals. Guidry and
constructed. The framework includes two important Patten (2010) found that companies that publish high-quality
dimensions: the greater the power of stakeholders, the more sustainability reports have a positive market response.
important they are to the disclosure of corporate social Conversely, the company's market response to low-quality
responsibility information; the more positive the strategic sustainability reports is negative. Verrecchia (2001) believed
situation of the enterprise, the more stakeholders expect the that corporate social responsibility information disclosure may
company to disclose information about its social responsibility. play a similar role as financial information disclosure, which
Under this theoretical framework, the purpose of corporate reduces information costs by reducing information asymmetry
social responsibility information disclosure is alleviating and transaction costs. Domestic scholar Zhao Liangyu (2017)
conflicts with interest groups. For the motivation of legal found that there is a negative correlation between the quality of
litigation costs, Patten (1991) and Gray & Vint (1995) found corporate social responsibility information disclosure and the
that when the company's industry faced environmental cost of equity financing or debt financing[5]. This effect is
pollution, legal proceedings and other difficulties, it would more pronounced in non-state-owned enterprises, that is, non-
disclose more social responsibility information. state-owned enterprises have strong incentives to undertake
social responsibilities and disclose social responsibility
B. The intrinsic driving force of the enterprise information.
Basu & Palazx (2008) believed that corporate social
responsibility is not only the result of external pressure but also B. The impact on an investor decision value
the embodiment of the inherent nature of the organization. Foreign scholar Dhaliwal et al. (2011; 2012) also studied
Kreps et al. (1982) established a standard reputation model in the reaction of investors in the capital market to the disclosure
economics, arguing that the level of corporate reputation of corporate social responsibility information. The study found
affects consumers' perceptions of the business and the that investors are more willing to choose companies that
decisions consumers’ made. If a company's environmental disclose social responsibility information as investment objects.
performance is good, its reputation in society will be higher And society disclosure of liability information can improve
than other companies. Companies with high reputations tend to analysts' forecast accuracy. Milne & Patten (2002) examined
disclose more social responsibility information to reflect their their responses to corporate disclosure of social responsibility
performance in social performance, and actively communicate information by issuing questionnaires to investors. The results

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of the survey showed that most people give more long-term information disclosure, we should continuously broaden the
investment to companies that have poorer environmental research field, conduct in-depth and detailed analysis in
performance in the current period but have more information combination with specific regions, systems, markets, and
disclosure. In terms of short-term investment, the conclusion is cultural environments, and improve the measurement methods
the opposite. The author believed that the social responsibility for corporate social responsibility information disclosure. The
information disclosed by the company in the current period is future direction of social responsibility information disclosure
not favored by investors, but it still has decision-making value research is forming a consensus conclusion recognized by the
in the long run. The domestic scholar Zhu Song (2011) found public. In terms of influencing factors, the internal mechanism
that the capital market evaluates higher for listed companies and decision mechanism of corporate social responsibility
that fulfill more social responsibility and disclose more social information disclosure should be deeply analyzed. Further
responsibility information [6]. And the capital market will also strengthening the driving force and motivation of corporate
increase the recognition of the listed company's own earnings social responsibility information disclosure. In terms of
information. economic consequences, we should explore the corporate
social responsibility information disclosure based on the
V. CONCLUSION market environment background. The market effect examines
the impact of corporate social responsibility information
This paper reviews the research results of domestic and disclosure on investor behavior, transaction costs, and market
international academic circles on the motives, influencing information environment.
factors and economic consequences of corporate social
responsibility information disclosure. Through combing the
relevant literature, we found that there is a close relationship
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forward to the future research on social responsibility

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