1、The Corporate Social Responsibility and Information TransparencyZHANG Qian1, YAO Lijie2, ZHENG Shen31. China Petroleum Materials Corporation, China, 1000292. School of Economics and Management Beijing Jiaotong University, China, 1000443. Guangdong Experimental High School, Guangdong, China, 510055Ab
2、stract: The Corporate Social Responsibility (CSR) and information transparency is increasingly important for companies. CSR report enriches corporate information disclosure while reflecting the firms sustainable development and corporate risk level. This study demonstrates that, with the higher qual
3、ity corporate social responsibility reports, the better information transparency as possible, enables stakeholders to reduce investment risk and increase business confidence. The allocation of resources becomes more efficient and the marketization of the economy is strengthened. Therefore, companies
4、 need to actively take social responsibilities and to attach high importance to the quality of reports of disclosure, thereby strengthening corporate governance, improve enterprise values.Key words: CSR, CSR Report Quality, Information Transparency1 IntroductionWith the deepening of market-oriented
5、economy, corporate social responsibility and transparency of corporate information are more and more important for enterprises. McDonalds KFC expired meat incident, Sanlu melamine incident of milk powder, Jinhu tire recall crisis, crisis events such as PetroChinas crude oil pipeline explosion in Dal
6、ian frequently exposed, the enterprises have been put in the forefront of CSR to torture. State and corporate leaders come to realize that the simple pursuit of profit and ignoring implementation of communal responsibility is not conducive to the sustainable development of enterprises. We should pay
7、 great attention to CSR scientifically in the long term. Therefore, in January 2008, the state-owned assets supervision and administration commission issued “The guidelines on the principal enterprises to fulfill CSR”. At the end of the year, the Shenzhen and Shanghai stock exchange added the condit
8、ionally mandatory disclosure of corporate social responsibility of the enterprise reporting requirements new policy in order to urge companies to better meet their social responsibilities.The fraud on the financial information disclosure of the British South Sea Firm in 18th century, the serious eco
9、nomic crisis caused by many American corporate disclosure fraud of financial information in 20th century, the outbreak of the Asian financial crisis in 1997, the collapse of the Enron firm the seventh world top firm in 2001 and so on, all these events were boiled down to the opaque information discl
10、osure. The series of events made the enterprise information transparency become the focus of economic theory and practice together, and made the information transparency become one of the most concerned about for the investors. At the same time, these series of events also reflect that the firms did
11、nt fulfill the CSR. So could firms improve the information transparency by carrying out CSR? Could firms improve the quality of information disclosure by disclosure of CSR report, and could these contents lead to the investors attention? The research is of great significance, and they are the princi
12、pal topics in this paper.On the analysis of the theoretic, we require a sample of A-share listed firms on the Shanghai and Shenzhen in China in 2012. We try the effect of CSR disclosure on information transparency using the scores of the listed CSR report by Rankins CSR Ratings (RKS). In addition, w
13、e obtain stock trading data and financial information from the Security Market and Accounting Research (CSMAR) database. We have carried on board the empirical research on the relationship between CSR and information transparency. Evidence shows that better corporate social responsibility disclosure
14、 on comprehensive evaluation and integration, content and technical scores, the higher transparency of information. The empirical results are very consistent with the hypothesis.In this paper, the second part is the literature review. The third part is the research hypothesis. The fourth part is the
15、 research design. The empirical results are presented in the fifth part, and the latter is the conclusion of this paper.2 Literature ReviewWith more attention to corporate social responsibility, more and more domestic and overseas enterprises voluntarily or be forced to disclose its CSR report. As n
16、on-financial information disclosures, CSR report usually includes the companys economic, environmental, social and governance performance reflecting a vast amount of information and fully reflecting the opportunities and risks enterprises facing. CSR report can help investors to understand the compa
17、ny situation, reduce information asymmetry. Thus, corporate social responsibility and corporate information transparency is closely related to the relevance of information.Study on the relationship between corporate social responsibility and information transparency began in the capital market since
18、 people pay more attention to corporate social responsibility, and has been widely discussed. On the one hand, Diamond Hess (2007) and Hess & Dunfee (2007) further research suggested that mandatory CSR reporting often results in empty rhetoric and biased information that affected the information tra
19、nsparency contrary to the original intention of CSR report.From the above literature review, the disclosure of CSR is mainly through the CSRs report. At present, the scholars have some disputes on the correlation of CSR and information transparency, and there is scarce study on the correlation betwe
20、en the CSR report quality and information transparency. Our study attempts to shed light on this debate by examining the impact of CSR disclosure on information transparency. And we will further study the correlation between the integrity of the corporate social responsibility report, content and te
21、chnical aspects and transparency.3 Research HypothesisOn one hand, stakeholder theory believes that anyone who can affect the enterprises production and management activities or vise versa are stakeholders in the enterprise, including investors, creditors, management, staff, government and the commu
22、nity, who enjoy the right to participate, the right to claim and the right to know. More and more firms choose to reveal the CSR report under the pressure of investors, consumers and other stakeholders for the enterprise operation itself. Usually only when businesses actively bear collective respons
23、ibility can all stakeholders get rights to participate, claim and the right to know. (Wang Jianqiong, 2009).One of the guarantees of the right to know of stakeholders is corporate information transparency. Thus it can be stated that the more transparent the information, the better corporate social r
24、esponsibility. On the other hand, according to the efficient market theory, in information highly transparent stock market, each investor and manager big or small are able to get the same amount of information, namely the more transparent information, the more effective market allocation of resource
25、s, the more effective market. Corporate social responsibility report and disclosure on economic, environmental, social and governance performance of non-financial information is the most effective way for every investor to understand the direction of enterprise development, the development potential
26、 and thus improve transparency of corporate information.Furthermore, depending on the theory of information asymmetry, when investors make investment decisions based on information they already have, their confidence level depends on the availability of information. As it is difficult to dissolve th
27、e estimated risk, investors and managers (enterprises of extraordinary risk) cannot predict and prevent risks enterprises have. Corporate adoption of enterprise social responsibility information disclosure increases investors information set, reduces the degree of asymmetry of information between ow
28、ners and management, reduces uncertainties about their future prospects, thereby enhancing the motivation of management social responsibility information disclosure, thereby enhancing the transparency of corporate information.Therefore, the hypothesis of this paper is the case that the better the CS
29、R performance, the higher the information transparency.4 Research Design In order to study the relationship between them, this paper established the regression model about information transparency and CSR. It is as follows. tititi tititi LEVPIMBTURNOVEDLYRCTSscoreTR,7,6,5 ,4,32,10,/ The variables ar
30、e defined as follows.（ ）is the information transparency index. We use high-frequency trade and quote data to ti,LogIconstruct our proxy for information transparency based on market microstructure models. Our proxy captures the price impact of a trade based on the theoretical model in Kyle (1985)s se
31、minar paper. Specifically, Kyle (1985) proposes a linear relation between order flows and price changes (i.e., price impact), with a lower price impact indicating higher information transparency. Following Glosten and Harris (1988) and Chan et al. (2008), we estimate the price impact measure using t
32、he following structural model: , where P is transaction price, V is trade size, and Q is tttt eQVP)(1trade sign (i.e., +1 for a buyer initiated transaction and -1 for a seller-initiated transaction). is the price impact coefficient that captures the degree of information transparency. Chan et al. (2
33、008) document that for their sample of 76 Chinese firms with A- and B- shares the mean estimate of is Yuan per share for the A-share market from January to December 2000. Given the small 7106.9value of , we calculate our price impact measure by taking a natural logarithm of multiplied by 107. Specif
34、ically, we define our price impact measure as follows: )10(7, LogPITRtiis the overall score of the CSR report.tiCSRscore,is the macrocosm score of the CSR report.Mis the content score of the CSR report.ti,is the technique score of the CSR report.tiTscore,Following Zhang Chengrui et al(2007), we sele
35、cted the firm information transparency mainly related control variables as follows. is the stock earnings volatility. It reflects the stock activity, but excessive volatility reflects that DRVOLthe stock risk is higher. The lower volatility of stock price means the lower degree of information asymme
36、try, namely high information transparency. High volatility means that the low degree of information asymmetry, namely high information transparency (Leuz & Verrecchua, 2000). Therefore, we expect that it is negative relation between stock earnings volatility and the information transparency.is the t
37、urnover rate. In this paper, we use it as substitution variables of trading volume. TUNETrading volume as a measure of liquidity, it reflects the willingness of investors to buy and sell shares. It is negatively relation between the willingness of investors and information asymmetry. So, it is posit
38、ively related to the information transparency.is cumulative annual rate of return. The index reflects the earnings of stocks. The better the YRCstock profits, the more transparent information disclosure. It is positively related to the information transparency.Earnings per share ( ) and book to mark
39、et ratio ( ), these indexes reflect the quality of stock. PI MB/The enterprise operating performance level is closely related to the stock. The firms do better in the business performance, the more information disclosure, the less information asymmetry. Therefore, it is positively related to the inf
40、ormation transparency.Asset-liability ratio ( ), is the final total asset-liability ratio. Prior studies have shown that in non-LEVstate-owned companies, the higher the ratio, the relative financial risk is higher, the less information transparency (Tan Jinsong, et al., 2010). But for the stability
41、of enterprises, the high debt ratio embodies the efficiency of enterprise funds. Borrowing to expand the scale, the enterprise vitality is strong. The information transparent is better. Therefore, we cant predict the relationship between and LEVinformation transparency.is the regression residualsti,
42、Rankins CSR Ratings (RKS) is the third-party authoritative assessing agencies for corporation social responsibility in China. It was established in 2007. In 2012, RKS evaluated the 582 listed firms CSR reports. Our initial sample includes all the 582 listed firms with required financial and trading
43、data after excluding the data that are incomplete or errors, the final sample are the 550 listed companies. The CSR data comes from the listed CSR report scores of the RKS. In addition, we obtain stock trading data and financial information from its China Security Market and Accounting Research (CSM
44、AR) database.5 The Empirical Analysis5.1 Descriptive statisticsTable 1 presents descriptive statistics for regression variables used in our analysis for the full sample. is the information transparency index with average -0.194 ,the minimum value -2.832, the TRmaximum value 2.410, which shows a larg
45、er difference. is the score of the CSR report with CSRscoreaverage 37.304 in class B, which has not reach the qualified requirements (if the full mark is 100 points). Component scores show that the average macrocosm score of the CSR report is 11.53 (if the full mark is 30). The average content score
46、 is 17.17 (if the full mark is 50). The average technical score is 6.39 (if the full mark is 20), all of which are not qualified. Other sides also show some differences. Table 1 Descriptive statistics Sample size MeanStandard deviation Min Max Med P25 P75TR550 -0.194 0.853 -2.832 2.410 -0.149 -0.724
47、 0.347CSscore550 37.304 13.602 15.110 83.670 32.950 28.560 42.270M550 11.531 4.665 2.813 26.484 10.080 8.203 13.971550 17.168 6.240 3.000 37.130 15.940 13.130 20.060sr550 6.385 1.920 3.199 16.324 5.625 5.184 7.169YRET550 0.049 0.277 -0.500 1.448 -0.009 -0.143 0.189DVOL550 0.020 0.010 0.010 0.040 0.0
48、22 0.019 0.026UN550 278.107 259.608 2.170 2406.608 200.782 121.032 340.181MB/550 0.729 0.278 0.165 1.557 0.160 0.063 0.320PI550 0.221 0.278 0.610 1.760 0.739 0.519 0.957LE550 0.516 0.217 0.014 0.980 0.534 0.358 0.6775.2 The empirical results and analysis5.2.1Correlation analysisIn order to reveal th
49、e correlation between the variables in the model, we use the Pearson and Spearman inspection to examine simple correlation coefficient and their significance level. In table 2, the correlation between the variables is showed by the Pearson and Spearman matrix. It shows that there is the significant positive correlation between CSR report score and the information transparency, which is the higher CSR report, the information transparency is better. At the same time, information transparency index and the earnings volatility, turnover rate, earnings per s
