Research On The Relationship Between Corporate Social Responsibility Information Disclosure And Insider Trading

The rule that listed companies must disclosure social responsibility report has been carried out for nearly ten years,Corporate social responsibility is increasingly being concerned by the regulators,companies themselves,investors and other stakeholders,This paper mainly explore the relationship between disclosure of corporate social responsibility information and insider trading.Insider trading,generally refers to the behavior that company's directors,supervisors,senior management,other insiders and their close relatives buy or sell their company's stock.It is the existence of information asymmetry and the principal-agent problem that provides a motivation for insiders to buy or sell the company's stock.Because they could get abnormal returns when they buy or sell the stock,so they hurt the fairness and efficiency of the market,furthermore,they also hurt their own image and company's image which is set for long time.But,it is gratifying that the disclosure of corporate social responsibility information could improve information asymmetry and then could improve information transparency,so it could restrain the opportunistic behavior of insiders trading.When company disclosure its social responsibility information,it means that company consider its image in capital market,it could help company set a good image when company release its social responsibility information report,it also could add the reputation of company and insiders.under the effect of reputation,insider trading behavior could be restrained.Recently,our stock market ups and downs,insiders buy and sell the stock exacerbated the volatility of the market.The ideals of corporate social responsibility is well known to the word.It is significant to theory construction and practice construction that this paper explore the relationship between disclosure of social responsibility information and insider trading.This paper based on the literature review of social responsibility information disclosure and insider trading,we summarized the previous research results and extend the direction and content,based on the analysis of the classical theory,we put forward the hypothesis.And then,taking a total of 9518 samples of 2012-2015 as an example,this paper empirically explore the relationship between disclosure of corporate social responsibility information and insider trading in China's A sharelisted companies.We find that There is a significant negative correlation between the issue of social responsibility information and the company's insider trading both in volume and frequency;Further more,when we divided insider trading into buying and selling transactions,the correlation is significant negative in buying transactions group as well as selling transactions group;When insider trading is divided into competitive and non competitive transactions,the correlation is significant negative in competitive transactions group but not significant negative in the noncompetitive transactions group.This is mainly because noncompetitive transactions is mainly consist with changes in the shareholding caused by dividend transfer,capital increase and share motivation;When insider trading is divided into private enterprises' insider trading and state-owned enterprises' insider trading,the correlation is significant negative in the private enterprise group,but not significant negative in state-owned enterprises group.This is because the nature of state-owned enterprises.Overall,this paper provides empirical evidence for the effect that the disclosure of corporate social responsibility information could suppress insider trading.