An Empirical Research Between Corporate Social Responsibility And Financing Constraints

With the continuous development of economic globalization, the idea of corporate social responsibility from western developed countries has gradually spread to China, become the "green barriers" of Chinese enterprises to participate in the international trade. As China’s construction of a harmonious society and the concept of sustainable development, the public pay more and more attention to the performance of corporate social responsibility. Under the pressure of public opinion and their own sustainable development, companies have joined to the action of fulfill social responsibility. However, from the social responsibility performance of Chinese enterprises, most of the companies’ social responsibility performance are not very well, need to further improved. At the same time, China’s capital market is not mature,making the listed companies face more serious financing constraint, directly affect the enterprise’s investment decision and value realization. So, whether listed companies can establish a good imageby, reduce the degree of information asymmetry, improve the present financing situation and ease the financing constraints by doing something on social responsibility will be a research focus in this article. Based on the data of listed companies during2008-2011, this paper uses the relevant theory and background of our system to examine the relationship between corporate social responsibility and financing constraints. The result shows that good performance on corporate social responsibility can reduce financing constraints.In addition, the nature of company ownership and external institutional environment also affect the relationship between corporate social responsibility and financing constraints.The positive effect of corporate social responsibility is mainly concentrated in firms located in region with better institutional environment and non-state-owned listed firms. We also examined the relationship between corporate social responsibility and financing sources. Found that for non-state-owned listed enterprises, social responsibility can not only promote debt financing, but also promote equity financing; But for state-owned listed enterprises, social responsibility can only promote debt financing, the promoting effect on the equity financing is not significant. The conclusions of this study provide new inspiration to solve our enterprises financing problem and also enriches the value of research on social responsibility from reducing financing constraints perspective. Playing an important role to promote listed companies social responsibility、reduce information asymmetry and further optimize the allocation of resources.