A Study On Imitation In Corporate Social Responsibility Information Disclosure

With frequent exposure of social responsibility issues, corporate socialresponsibility (CSR) has been drawing increasing public attention, and the regulatoryauthorities in China have implemented a series of regulations and rules on CSR. So,taking on social responsibility and disclosing the social responsibility information hasbecoming inescapable responsibility to the company. Due to the late start of Chinesemarket economy, both theories and empirical research on social responsibility is still inthe development stage. Thus, the study on corporate social responsibility is of muchimportance. Isomorphism, a part of legitimacy mechanism, is rarely applied to theinformation disclosure area in the academic fields at home and abroad. Therefore, underthe framework of institutional theory, this paper use theoretical analysis and empiricalmethods to investigate the imitation in corporate information disclosure underlegitimate pressure and uncertainty, and the impact on the market it results in.Firstly, based on a comprehensive review of existing literature regarding onimitation behavior between organizations, corporate social responsibility disclosure andexternal governance mechanisms, this article analyses the main theses and proposes thehypotheses, combing new institutional theory with stakeholder theory and signalingtheory. And then, this paper analyzes the corporate social responsibility disclosure in theCSR reports of mandatory disclosure companies listed in Stock Exchange from2006to2010, constructs indices of imitation modes including frequency imitation, traitimitation and outcome imitation, and conducts an empirical research by multipleregressions. The result shows that the isomorphism and imitation exist in corporatesocial responsibility disclosure, and firms imitate the average CSR disclosure level ofothers in the same industry, rather than that of other firms. Furthermore, this studyexamines the impact of governance environment and analyst coverage on corporateimitation, and finds that firms located in regions with a good governance environmentincrease the imitation degree, resulting in higher level of disclosure. On the other hand,firms with high analyst coverage improve the CSR disclosure extent, and reduce thedegree of imitation. That is, governance environment brings more legitimacy pressurethan supervision which results in more imitation. While analyst coverage can not onlyexert pressure on firms, but serves as an external monitoring mechanism, so that enterprises have to use correct method, i.e. fulfilling more social responsibilities, toimproving the level of CSR information disclosure, which is the key difference betweenthem. In a further analysis, this paper investigates the influence of imitation in CSRdisclosure on market evaluation and informativeness of accounting Earnings. It findsthat the better firms perform on CSR, the more they gain on the stock market, and thehigher evaluation of market on their earnings, namely the higher informativeness ofaccounting earnings, and the lower degree of imitation will be more significant on thetwo effects. It can be seen that market approves the firms without imitation. Finally, Isummarize the main conclusions, put forward some suggestions from the angle ofcompanies, regulators and the public, and points out the research direction in the future.This study extends the existing research on information disclosure to theperspective of social economics, and provides a new evidence for the convergence inthe institutional process from a more microcosmic level by the imitation in informationdisclosure. Meanwhile, the paper take the governance environment and marketintermediaries into account, enriching the external governance mechanisms to the fieldof information disclosure and managers’ behavior study.