Mandatory CSR Disclosure and its Insurance Effect: Evidence from China

Xinmeng He, Antai Li and Keda Zhu
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Xinmeng He: School of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Wuhan, PRC,
Antai Li: School of Management, Huazhong University of Science and Technology, 1037 Luoyu Road, Wuhan, PRC,
Keda Zhu: School of Finance, Shanghai University of Finance and Economics 777 Dingguo Road, Shanghai, PRC.

International Journal of Economics and Financial Issues, 2020, vol. 10, issue 6, 154-162

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. (search for similar items in EconPapers)
JEL-codes: G14 G18 G38 L78 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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