Corporate Social Responsibility,Political Relationship And Debt Financing

Private enterprises play a very important role in the economic development.As the development of the modern society,people pay more attention on food safety,the improvement of environment,such as people are always attracted to the continuously red warning of frog.Accordingly,private enterprises' social responsibility is increasingly noticed.On one hand,private enterprises are trying to transform into environmentally enterprises,On the other hand,during transition period,the government controls important resource,which determines the existence and development of private enterprises.While the natural social bias for private enterprises,makes them less chance to get the development resource and financing.In this background,private enterprises in order to get a loan,tax incentives and financing facilities from the government,they have to narrow the relationship and establish a political association with the government.Accordingly,many private enterprises fulfill their social responsibility just for more recourse or bonding themselves with the government.Social responsibility becomes the fig leaf to whitewash their business.It formed a deformed relationship between the private enterprises and government.As we all known,for the harmonious development,private enterprise should perform the social responsibility as the endogenous demand and establish the correct social responsibility motive.This article based on stakeholder theory,reputation mechanism theory,information asymmetry theory,resource dependence theory and agency cost theory,to study the relationship of corporate social responsibility,political relationship and debt financing of private enterprises in China.This paper reviews the literatures and relevant theories,the method of normative research and empirical research are also applied in this work.The samples are chosen from the A-share private listed companies of Shanghai stock market from 2010 to 2015,it includes 1334 samples in total.We evaluate the social responsibility by social donations expenditure,that is to say,the notes to the financial statements of non-operating expenses of the donations expenditure are considered.The political correlation is evaluated by the data of executive's characteristics from the CSMAR database.The debt financing is evaluated by long-term debt;it is the ratio of long-term debt and total assets.We have a further study on corporate social responsibility,political relationship and debt financing and give the conclusion as follows:First,the private enterprises with higher degree of fulfillment of social responsibility are more easily to obtain debt financing,corporate social responsibility and debt financing at 1% level is significant positive correlation.Second,from the point of political relationship,the enterprises with political relationship have a higher ability to obtain debt financing than those without political relationship,there is a significant positive correlation between political relationship and debt financing at the level of 10%.Third,this paper also carries on the regression to the relationship between the three,to test whether corporate social responsibility has positive effect on the relationship between political relationship and debt financing.Because the private enterprises are in the development stage,the enterprise's understanding and fulfillment of social responsibility are different,so this result has not been verified.In short,to break up the financing constraints,private enterprises should view social responsibility as a development strategy,and transform the social responsibility into endogenous needs.Only in this way,they can find their own road of harmonious development.