Research On The Relationship Between Corporate Social Responsibility Disclosure And Debt Financing Cost Of Private Enterprises

Since the reform and opening up,private enterprises have made tremendous contributions to China's economic development and they have become an indispensable part of China's economy.However,compared with the important position of Private Economy,private enterprises are ignored by banks and other lending institutions.The information asymmetry between private enterprises and creditors has made private enterprises suffer from financing problems for a long time.The most direct way to solve information asymmetry is to disclose relevant information and transmit positive signals to external investors.So can social responsibility information disclosure help companies reduce debt financing costs? Compared with state-owned enterprises,private enterprises are congenitally deficient.Private enterprises have less living space and development opportunities.Political connections can help private entrepreneurs maintain close relations with government departments,helping them obtaining financial subsidies,tax preferences or preferential policies.It can also provide implicit guarantee of government credibility.So,will the existence of political connections in private enterprise affect the degree of creditor's dependence on social responsibility information when making debt decisions? Will political connection play the same role in different institutional environments? This paper discusses the relationship between corporate social responsibility disclosure and debt financing cost from the perspective of political relevance.After collating the domestic and foreign literature,analyzing the financing difficulties of private enterprises.This paper chooses private enterprises which listed on A-share motherboard from 2014 to 2017 as research samples.Using the rating of social responsibility report published by Hexun as a measure of corporate social responsibility information disclosure.The results are as follows:(1)There is a negative correlation between social responsibility disclosure and the cost of debt.(2)Political connections weaken the relationship between social responsibility disclosure and the cost of debt.(3)In poor institutional environment areas,political connections have a more significant effect on the weakening of the relationship between social responsibility information disclosure and debt financing costs.The results of this study show that in order to solve the problem of high debt financing cost of private enterprises in China,private enterprises,especially those without political connections,should strive to improve their social responsibility information disclosure.At the end of this paper,some practical and effective policy suggestions are put forward for private enterprises and supervision departments.The conclusion of this study has strong practical significance for private enterprises and related government departments.