Buffering Effect Of Corporate Social Responsibility And Impression Management

Securities analysts play an important mediating role in the collection,transmission and interpretation of information,which can reduce the information asymmetry between firms and investors.At the same time,securities analysts release research reports and income estimates for the firms,shaping investors’ expectations of the firms’ future earnings.Such earnings forecasts will bring earnings pressure to firms.Investors require that the actual earnings of the firm meet or exceed the earnings expectations of securities analysts.When the firm meets or exceeds the earnings benchmark,the credibility of the firm will be established.When the firm fails to meet these earnings expectations,its share price will be affected.Meanwhile,analysts’ consistent earnings estimates represent an important performance target for top managers.Top managers need to understand and meet the income estimates of securities analysts,due to the reason that failure to meet these performance goals may affect the reputation and career of top managers,and endanger their salary and position.With the concept of corporate social responsibility(CSR)widely acccepted in the society,as well as the gradual development of the securities market,the number of firms engaged in corporate social responsibility activities in China is increasing,and the corporate social responsibility activities involved are more and more complex.Nowadays,the world is in great change,how to deal with the public crisis and negative events that occur from time to time,and how to survive and seek development in the environment is a problem that firms need to cope with.Research shows that corporate social responsibility can improve reputation and stakeholder relations,accumulate reputation capital and moral capital for firms,supplement stakeholders’ information sources,and mitigate the impact of public crises or negative events on firms.Although some research has focused on the buffering effect of corporate social responsibility when firms are faced with public crisis or negative events,there lacks research on the possible consequences of the buffering effect of corporate social responsibility.The corporate social responsibility report discloses the performance of corporate social responsibility,and can alleviate the degree of information asymmetry within and outside the firm to a certain extent.Due to the combination of mandatory disclosure and voluntary disclosure,and the lack of strict disclosure standards,firms can determine the content and extent of information disclosure to a large extent by themselves,leading to problems such as selective statements and information distortion from time to time.It is demonstrated in a large amount of research that the sources of impression management behavior in corporate social responsibility reports are mainly external pressure(legitimacy pressure,stakeholder relations)and internal motivation(performance pressure,resource competition).However,there is rare research that documents analyst earnings pressure and the buffering effect of corporate social responsibility as possible antecedents of impression management in corporate social responsibility disclosure.Based on stakeholder theory,agency theory and impression management theory,this research constructs a theoretical model of "analyst earnings pressure-buffering effect of corporate social responsibility-corporate social responsibility disclosure impression management".On the theoretical level,this research explores the buffering mechanism of corporate social responsibility,as well as the impression management behavior of corporate social responsibility disclosure;on the technical level,this research constructs a measure of the impression management of corporate social responsibility reports,which enriches the study of text information mining technology of corporate social responsibility reports.Based on the above theoretical and practical background,this study focuses on the following three research qiestions:Research question 1: Will analyst earnings pressure have an impact on firm value and top managers? The first study is the pre-analysis of this research.Using the sample of Chinese A-share listed companies from 2010 to 2020,this research examines the economic consequences and corporate governance consequences of analyst earnings pressure.In terms of economic consequences,it tests the impact of analyst earnings pressure on firm value;in terms of corporate governance consequences,it examines the impact of analyst earnings pressure on the stability and salary of top managers.Research question 2: If analyst earnings pressure has a negative impact on firm value and top managers,can corporate social responsibility buffering this impact? Does technical corporate social responsibility(TCSR)and institutional corporate social responsibility(ICSR)have the same buffering effect? The second study analyzes the boundary conditions of the above relationships and examines the moderating role of corporate social responsibility.In the further analysis,according to the different stakeholders,this research explores the technical corporate social responsibility and institutional corporate social responsibility,and whether these two different types of corporate social responsibility activities play different moderating roles in the impact of analyst earnings pressure on firm value and top managers.Research question 3: If corporate social responsibility has a buffering effect,will companies adopt impression management strategies when disclosing social responsibility reports in the face of analyst earnings pressure? And what are the boundary conditions of the impact of analyst earnings pressure on corporate social responsibility disclosure impression management? The third study analyzed whether the firm would conduct impression management when disclosing social responsibility,and tested whether the firms actually improved its corporate social responsibility performance in the face of analyst earnings pressure,and in the samples of different disclosure forms(voluntary disclosure,mandatory disclosure)and third-party certification(without third-party certification,with third-party certification),whether the impact of analyst earnings pressure on corporate social responsibility disclosure impression management behavior will be different.The main findings of this research are:(1)Analyst earnings pressure will have a negative impact on firm value and top managers.The greater the analysts’ earnings pressure is,the lower the abnormal return rate of stocks,the stability and salary of top managers will be.If firms fail to meet the expected performance of analysts,it will cause the decline of the firm’s share price,the change of top managers,and the reduction of salary;(2)Corporate social responsibility performance has buffered the negative effect of analysts’ earnings pressure on firm value and top managers’ stability,while it does not have an obvious buffering effect on top managers’ salary.TCSR has a significant buffering effect on the negative impact of analysts’ earnings pressure,while ICSR has not;(3)The greater the analysts earnings pressure is,the higher the impression management of corporate social responsibility reports will be.Further analysis shows that firms have only improved the disclosure quality of corporate social responsibility reports,but have not actually improved corporate social responsibility performance,proving that impression management does exist,and firms have the behavior of whitewashing social responsibility reports.For firms that disclose mandatorily,and firms without third-party certification,analyst earnings pressure has a significant positive impact on corporate social responsibility impression management,while for firms that disclosure voluntarily,and firms with third-party certification,analyst earnings pressure has no significant impact on corporate social responsibility impression management.The innovation of this research is mainly reflected in: First,this research builds a bridge by linking the buffering effect of CSR with the impression management of CSR disclosure.This research points out that the buffering effect of corporate social responsibility does not necessarily lead to the actual investment of firms in social responsibility activities,but may lead to the impression management behavior in corporate social responsibility reports.Corporate social responsibility activities require long-term investment,while corporate social responsibility disclosure only requires relatively low costs.Therefore,firms may conduct impression management when disclosing social responsibility reports,and replace the actual investment in social responsibility by improving the quality of reports.This research is an integration of existing research on the buffering effect of corporate social responsibility and corporate social responsibility disclosure.Second,this research supplements the relevant research on the buffering effect of corporate social responsibility.Previous studies on the buffering effect of corporate social responsibility were mostly based on public crises or negative events.Unlike public crises or negative events,analysts’ earnings pressure is affected by both the expected external performance and the actual corporate performance.The research using analysts’ earnings pressure as a background,enriches the application scenarios of corporate social responsibility buffering effect.In addition,previous studies on the buffering effect of corporate social responsibility mostly focused on the moderating mechanism for firms,lacking the moderating mechanism analysis of the impact on top managers.This research supplements the regulatory consequences for top managers.Third,this research expands the application of impression management theory and text analysis methods in the field of corporate social responsibility reporting.Previous studies on corporate impression management have focused on the corporate annual reports,but rarely on the issue of impression management in corporate social responsibility reports.Corporate social responsibility report is more flexible and diverse than the annual report,and plays an important role for stakeholders.At the same time,this research applies text analysis and computer technologies to the research of corporate social responsibility reporting in China.Although some literature has begun to pay attention to impression management behavior in corporate annual reports,the research on impression management behavior in corporate social responsibility reports is relatively rare.The domestic text research is at the initial stage as a whole,and Chinese word segmentation is not as accurate as English,which increases the difficulty in applying text analysis technology in Chinese management field.This research measures the impression management degree through the change of CSR report text,and uses the obtained data to conduct empirical test,which makes a useful exploration for the relevant research of text analysis technology.