Mandatory CSR Disclosure and its Insurance Effect: Evidence from China

Authors

  • Xinmeng He School of Management, Huazhong University of Science and Technology
  • Antai Li School of Management, Huazhong University of Science and Technology
  • Keda Zhu School of Finance, Shanghai University of Finance and Economics

Abstract

China Securities Regulatory Commission (CRSC) requires listed companies to issue CSR report mandatorily from 2008. To examine the effect of mandatory CSR disclosure, we adopt the PSM-DID introduced by the mandatory requirements. We find that mandatory disclosure reduces stock return and increases stock volatility. We further investigate the insurance effect of CSR. After the requirement changes, firms are more regulates its behavior by reducing violation cost in the stock market and increasing environmental protection expenditure, especially in State-Owned Enterprises. It indicates that Insurance Effect of CSR can serve a good role in building a social and environmentally friendly society despite mandatory CSR disclosure hampers its financial performance.

Keywords: Corporate social responsibility; Insurance effect; Mandatory disclosure.

JEL Classifications: G14; G18; G38; L78

DOI: https://doi.org/10.32479/ijefi.10657

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Published

2020-11-11

How to Cite

He, X., Li, A., & Zhu, K. (2020). Mandatory CSR Disclosure and its Insurance Effect: Evidence from China. International Journal of Economics and Financial Issues, 10(6), 154–162. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/10657

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