Research On Corporate Social Responsibility And Cash Holding

In 2020,the General Secretary Xi Jinping emphasized the importance of social responsibility many times in domestic and international conferences,and gave policy and institutional support from the perspective of toplevel design,which not only put forward specific requirements for enterprises to fulfill their social responsibilities,but also released an important signal for various industries and departments to attach importance to the implementation of social responsibilities.In this context,more and more enterprises begin to realize the important impact of social responsibility on the high quality of enterprises from the perspective of strategic positioning,and more and more enterprises begin to attach importance to and fulfill social responsibility.Can enterprises really help them achieve sustainable development by fulfilling their responsibilities? The existing research and discussion did not give a clear answer.Some scholars believe that fulfilling corporate social responsibility can create a good corporate image,meet the interest needs of all stakeholders,gain recognition and favor from investors,and thus obtain more resources and conditions to meet the needs of long-term development of enterprises.However,through further analysis,it can also be found that the social responsibility of most enterprises is still superficial.Although many enterprises express that they are fulfilling their social responsibility in the publicly disclosed information,most enterprises are not motivated by voluntariness,but more to respond to the policy requirements of the state and the government,so as to obtain more government resources.In the context of imperfect economic system and inadequate supervision in China,what economic consequences will enterprises have when fulfilling social responsibility? When it comes to the business decisions of micro enterprises,is it a value weapon for enterprises to fulfill their social responsibilities to achieve high-quality development? Or is it a self serving tool for management to seek personal interests? To answer these practical questions,we need to cut into a unique research perspective in theoretical research.Cash holding decision provides a good perspective for analyzing the economic impact of corporate social responsibility.Enterprise cash,as the most liquid asset within the enterprise,on the one hand provides a solid financial foundation for enterprises to fulfill their social responsibilities,on the other hand,it will also become a convenient tool for management to cover up their opportunistic behavior.Therefore,this thesis takes the level of corporate cash holdings as the starting point,and selects all A-share listed companies in Shanghai and Shenzhen from 2009 to 2019 as the research object to explore the effect and mechanism of social responsibility on the level of cash holdings.The empirical results of this thesis found that:First,corporate social responsibility will increase the level of cash holdings,and through a series of robustness tests,this conclusion is still valid.Further,by exploring the mechanism of the two,it is found that the impact of corporate social responsibility on cash holdings is not through financing constraints,but through optimizing corporate governance.Moreover,enterprises with good corporate social responsibility performance can help optimize their cash holding behavior,that is,enterprises can restrain ineffective investment and increase dividend distribution and R&D investment by fulfilling their social responsibility.This shows that corporate social responsibility is helpful to optimize the internal behavior decision-making of enterprises,and it is a value weapon for enterprises.Second,the research on corporate cash holding behavior by the category of corporate social responsibility shows that: fulfilling shareholder responsibility not only significantly increases the level of cash holding,but also helps optimize the dynamic use process of cash holding,that is,curbing excessive investment promotes enterprises to invest in research and development and pay dividends.Fulfilling employee responsibilities can significantly increase the level of cash holdings and curb excessive investment,but it has little impact on the R&D investment and dividend payment of enterprises.Fulfilling government responsibilities can significantly increase the level of cash holdings and promote enterprises to invest in R&D and dividends,but it has little impact on enterprises’ over investment behavior.Fulfilling supply chain responsibilities can significantly increase the level of cash holdings and promote enterprise R&D investment.Fulfilling environmental responsibilities can increase cash holdings,curb excessive investment and increase R&D investment.The results of this chapter show that different actors have different influence paths on cash holding behavior.Third,from the perspective of corporate characteristics,the research on the differential impact of corporate social responsibility on corporate cash holdings found that compared with state-owned enterprises,the corporate social responsibility of non-state-owned enterprises has a more significant role in improving the level of cash holdings,indicating that non-state-owned enterprises are more inclined to increase their value reputation,obtain external resources and optimize the efficiency of capital use by fulfilling their social responsibilities.Compared with the enterprises with high growth,the corporate social responsibility with low growth has a more significant role in improving the cash holding level,that is,the agency problem of the enterprises with low growth is more serious.By fulfilling the social responsibility,enterprises can help to alleviate their information asymmetry with the outside world and improve the efficiency of capital use.Compared with the group with a low number of analysts,when the number of analysts is high,corporate social responsibility plays a more significant role in improving the level of cash holdings,indicating that the tracking behavior of analysts helps investors fully understand the future value of corporate social responsibility,alleviate adverse selection and the resulting financing constraints,thus enhancing the ability and willingness of managers to fulfill their social responsibilities.At the same time,Improve the use efficiency of funds by monitoring the implementation process of social responsibility.Fourth,under different economic system environments,the research on the impact of corporate social responsibility on the level of corporate cash holdings found that: compared with the group with low economic uncertainty,when the external economic uncertainty is high,corporate social responsibility has a more significant role in improving the level of cash holdings,that is,when the external economic uncertainty is high,enterprises can alleviate the information asymmetry with the outside and improve the efficiency of capital use through the performance of social responsibility.Compared with the group with low marketization process,when the regional marketization process is high,corporate social responsibility plays a more significant role in improving the level of cash holdings,that is,the marketization process helps to standardize the performance of corporate social responsibility and strengthen the supervision of the process of cash holdings.When the product market is more competitive,enterprises that actively fulfill their social responsibilities can well handle the relationship with key stakeholders(such as the government,customers and employees)to gain competitive advantages and improve the efficiency of capital use.Finally,when exploring the value effect of corporate social responsibility,it is found that the impact of corporate social responsibility on cash holdings can not only bring about the improvement of business performance,but also enhance the market value of enterprises.According to the classification of social responsibility,different types of social responsibility will produce different value effects.Shareholder responsibility,employee responsibility,government responsibility and environmental responsibility increase the business value of enterprises,while shareholder responsibility,supply chain responsibility,government responsibility and environmental responsibility increase the business value of enterprises.Further,the spillover effect study found that the spillover effect of social responsibility not only increased the cash holding value of a single enterprise,but also increased the cash holding value of the industry as a whole.That is,the performance of social responsibility inspired other enterprises in the industry to perform their social responsibilities,which made the enterprises in the industry have good moral standards and higher information transparency,and reduced the degree of information asymmetry between enterprises in the industry and investors,Gain investors’ recognition and goodwill for the whole industry.