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Mandatory CSR Disclosure and its Insurance Effect: Evidence from China

Author

Listed:
  • 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.)

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.

Suggested Citation

  • Xinmeng He & Antai Li & Keda Zhu, 2020. "Mandatory CSR Disclosure and its Insurance Effect: Evidence from China," International Journal of Economics and Financial Issues, Econjournals, vol. 10(6), pages 154-162.
    • Handle: RePEc:eco:journ1:2020-06-19
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    Cited by:

    1. Meijui Sun & Ming-Chang Huang, 2022. "Does CSR reputation mitigate the impact of corporate social irresponsibility?," Asian Business & Management, Palgrave Macmillan, vol. 21(2), pages 261-285, April.

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    More about this item

    Keywords

    Corporate social responsibility; Insurance effect; Mandatory disclosure.;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • L78 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Government Policy

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