Study On The Impacts Of Corporate Social Responsibility, Financial Transparency On The Cost Of Equity Capital In China’s Listed Companies

Adequate and transparent information disclosure of the listed companies, including corporate financial disclosure and corporate social responsibility(CSR) disclosure, has important significance for regulating the stock markets and protecting the interests of stakeholders. In order to encourage listed companies to improve the quality of information disclosure, the economic consequences of information disclosure have been studied. Particularly, because the cost of equity capital is a critical conception of financial management, the impacts of information disclosure on the cost of equity capital have been become one of the research hotspots in this area.The most previous literatures research the impacts of corporate financial disclosure and corporate social responsib ility disclosure on the cost of equity capital respectively. So, does also the interaction of the two kinds of disclosure affects the cost of equity capital? The paper constructs a logical model of the impact of corporate information disclosure on the cost of equity capital based on the existing literature, which systematically explain how the corporate information disclosure can influence the cost of equity capital theoretically, and on this basis, this paper examine the effects of CSR disclosure, financial disclosure and their interaction term on the cost of equity capital in C hinese listed companies. O n the one hand, the research provides the basis for promoting the listed companies to reveal the CSR and financial disclosure. On the other hand, through studying the impacts of the interaction of the two kinds of disclosure on the cost of equity capital, the potential relationship between the two forms of disclosure is preliminarily explored, which is beneficial for enterprises to reasonably allocate resources between the two types of disclosure and then to improve the quality of information disclosure effectively and comprehensively.Based on the data of A-shares listed companies in China, the study finds that: First, the better corporate financial transparency can significantly reduce the cost of equity capital. Second, the higher CSR disclosure quality can also significantly reduce the cost of equity capital. Third, CSR disclosure and financial transparency are interactive in reducing the cost of equity capital. That is to say, the better the CSR disclosure, the corporate financial transparency can more greatly reduce the cost of equity capital, in turn, the higher corporate financial transparency, the CSR disclosure can more greatly reduce the cost of equity capital.According to the results, the paper puts forward some suggestions for the government and regulatory departments, relevant social organizations and media, enterprises and their stakeholders, which have important practical significance for pro moting the development of CSR, improving the quality of corporate information disclosure, protecting the interests of stakeholders, and regulating the stock market in China. Moreover, the paper is helpful to further understand the theoretical and practical economic effects of the two kinds of disclosure and the potential relationship between the two kinds of disclosure.