Corporate Social Responsibility And Listed Companies’ Financial Constraints

At present, Chinese enterprises’ social responsibility consciousness still can beimproved largely; in developed countries, it is widely believed that following the phraseof primitive accumulation of capital and resource integration, a new competition stage-"corporate citizenship" has come. A variety of measures can be taken to promotecorporate social responsibility, in addition to administrative means, market forces-the"invisible hand" is particularly important. As a rational economic person, enterprisemanagers give special attention to cost-benefit analysis. This dissertation from theperspective of corporate social responsibility and its economic consequences, attempts toexamine the effects of corporate social responsibility on financial constraints, which willprovide enterprise managers and related institutions with reference on financialmanagement and sustainable development.According to the previous researches, this dissertation defines corporate socialresponsibility (CSR) as in the case of normal production and operation the corporationconsiders not only the demands of the shareholders but also the demands of creditors, theemployees, the suppliers, the government and the charity, consciously taking on theresponsibilities to these stakeholders, and the responsibility is equal to or higher than thelegal requirement and often has a positive influence on the stakeholder and the society.Financial constraints is essentially due to differences between internal and externalfinancing costs, and financing cost is influenced by various kinds of macro and microfactors. Stakeholder theory and social contract theory analyze incentives to fulfill CSR;theory of social capital and resources, competitiveness theory, asymmetric informationtheory, signal transmission theory, and transaction cost theory analyze the influence ofCSR on the external and internal capital markets. Empirically, a modified vision is basedon Almeida’s etc.(2004) model of the cash flow sensitivity of cash depicting financialconstraints, using firm-data from Shanghai and Shenzhen A shares for the years of2010-2012via multiple regression analysis to study the impacts CSR of differentstakeholders having on financial constraints. Through this study, the following conclusion are drawn: corporate socialresponsibility tor creditors and shareholders and to public welfare has a negativeinfluence on the relationship between the cash flow and cash holdings, these two typesof corporate social responsibility can alleviate the financial constraints within the listedcompanies; corporate society responsibility to employees, suppliers or the governmentdoes not influence the relationship between the cash flow and cash holdings negatively,that is, these responsibilities do not ease financial constraints within the listed companies.