EconPapers    
Economics at your fingertips  
 

Do Financial Markets Care about Corporate Social Responsibility Disclosure? Further Evidence from China

Shan Xu and Duchi Liu

Australian Accounting Review, 2018, vol. 28, issue 1, 79-103

Abstract: Corporations increasingly define their corporate social responsibility (CSR) activities as a part of their business. However, is this trend beneficial to investors? Based on an event study methodology and a sample of Chinese listed companies, we extend the literature on voluntary disclosure by exploring the role of CSR disclosure in reducing stock market information asymmetry, as proxied by share price volatility and liquidity. Our results show that the share price volatility after CSR disclosure is lower than before CSR disclosure; however, the trend is that it decreases first and then increases for three months following disclosure. Stock liquidity also significantly improves after CSR disclosure; however, it increases first and then decreases. Additionally, by dividing CSR disclosure into economic (hard) disclosure and generic (soft) disclosure, we find that the reduction in information asymmetry is higher for hard disclosure than soft disclosure, suggesting that although CSR disclosure does indeed have an impact on investors’ behaviour in China, an economic†based disclosure contributes more substantially. Finally, to better understand the characteristics of the Chinese financial market, we also explore the role of marketisation with results that show that the effect in reducing information asymmetry is greater for companies located in a region with a higher degree of marketisation.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/auar.12161

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ausact:v:28:y:2018:i:1:p:79-103

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1035-6908

Access Statistics for this article

Australian Accounting Review is currently edited by Linda M. English

More articles in Australian Accounting Review from CPA Australia
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2019-02-23
Handle: RePEc:bla:ausact:v:28:y:2018:i:1:p:79-103