A Study On The Determinants Of Corporate Social Responsibility Disclosure Ratings By Chinese Listed Companies

A large variety of social and environmental problems come about with the rapid economical development in our country, and they have been drawing massive public attention. Traditional and web-based media have been focusing on issues like environmental pollution, consumption of natural resource, product quality, labor and corporate rights. Corporate social responsibility has been emphasized and thought to be a key factor of the sustainable development of the whole society. State Grid Corporation of China was the first central enterprise to issue a report on social responsibility in March2006. With more and more enterprise in China showing their care about environment, labor rights and charity, we still have numerous examples of corporations that are not carrying out their social responsibilities, and all these have made social responsibility report of enterprises an important topic.I. Research PurposeSocial responsibility report is the main method for stakeholders to know about related information of the company. With the related documents filed by Shenzhen Stock Exchange and Shanghai Stock Exchange in2006and2008, the number of social responsibility reports has grown rapidly since2006. However, accounting for social responsibility and its information disclosure had not been a hot research topic till recently. There is no specific regulation or law regarding such information disclosure. Also we don’t see a unified evaluation system of social responsibility information disclosure. The situation remains to be improved.Social responsibility report is important since it acts as the major source for stakeholders to access relevant information. In order to promote the level of social responsibility information disclosure in our country, it’s important to study the factors that can affect such information disclosure. And a unified standard for evaluating the disclosure is also necessary. Base on the above facts, this paper’s research purposes are listed as followed:(1) Establishing a systematic evaluation standard for information disclosure of reports on social responsibility, which can assess the quality of the information disclosure comprehensively and accurately.(2) Studying the factors that have impact on information disclosure of reports on social responsibility.(3) Making suggestions on relevant regulations and policies in order to achieve a standardized information disclosure of reports on social responsibility.II. ContentsThis paper contains two major parts based on literature review. First one is the quality evaluation of information disclosure of reports on social responsibility. Secondly we empirically analyze and categorize the factors affecting the quality of information disclosure of reports on social responsibility. Based on the review of a company’s historic information disclosure contents and pattern, this paper evaluates the quality of the disclosure by three widely used methods:(a) Content analysis,(b) Index,(c) Survey. We also make reference to several notable social responsibility information disclosure evaluation standards issued by both domestic and overseas institutions. Eventually, the paper concludes a Five-dimensional evaluation method and grades all the samples objectively. For the second part, taking into account the particular legislative and regulatory system of China, we categorize the factors affecting the information disclosure of reports on social responsibility into three classes, which are characteristics of the firm, economic motives of the firm and firm management structure, respectively. The paper utilizes empirical methods such as Descriptive statistics, Correlated Analysis and Multiple Regression Analysis. At the last part of the paper, based on the previous research, we give our advices (e.g. on firm management structure) for better quality of the information disclosure. We also make suggestions to regulatory institutions on relevant policy making.The contents of this paper are organized as below:Chapter One:Introduction on background of research, research significance, goals, ideas, methods, as well as the main contribution.Chapter Two:Research summary on information disclosure of report on social responsibility.Chapter Three:Theoretical analysis. There are three parts in this chapter. Firstly, main ideas of four theories (stakeholder theory, legitimacy theory, agency conflicts theory and theory of sustainable development, respectively) are stated. Secondly, the factors affecting the information disclosure of reports on social responsibility are categorized into three classes mentioned above. Finally, the paper analyzed the evaluation standard of information disclosure of report on social responsibility theoretically and concludes its own assessment method.Chapter Four:Social responsibility information disclosure assessment on sampled Chinese listed firms and its result analysis.Chapter Five:Empirical analysis on factors affecting the information disclosure of reports on social responsibility.Chapter Six:Advices and outlook. The paper makes suggestions and advices for both firm and government. The insufficiencies of this paper and the outlook of social responsibility information disclosure are given.According to both theoretical and empirical analysis. We find:(1) The average level of information disclosure of social responsibility is still relatively low.(2) Big companies, companies with higher profitability and higher state owned share generally have better information disclosure of social responsibility. Companies in the heavily pollution industries also tend to have better scores.(3) There is strong positive correlation between media exposure and the test score.(4) Companies have more independent directors, larger board of directors and larger board of supervisors have manifestly better scores.Ⅲ. Major Contribution(1) The evaluation standards and test methods of social responsibility information disclosure summarized in this paper can provide reference for further researches.(2) The paper classifies the factors affecting the information disclosure of reports on social responsibility into characteristics of the firm, economic motives of the firm and firm management structure, respectively. This categorization could help researchers comprehensively analyze various kinds of factors.(3) Through the analysis of the factors affecting the information disclosure of reports on social responsibility, we can have a better grasp of the motives of different companies to disclose the relevant information. All these research and the suggestions and advices given in the paper could be illustrative for both government and firms.