The Impact Of Capital Market Opening On Corporate Social Responsibility

In recent years,China’s comprehensive strength has continued to improve and its influence in the international market has increased significantly,all these achievements cannot be achieved without the implementation of the opening-up policy,as one of the important areas,China’s capital market has also ushered in a higher level of opening-up.Taking the implementation of the Shanghai-Hong Kong Stock Connect trading system in November 2014 as the starting point,A series of reform measures such as Shenzhen-Hong Kong Stock Connect,Bond Connect and Shanghai-London Stock Connect have been carried out in succession,creating a brand new mode for cross-border trading for domestic and overseas investors and achieving the investment and financing objectives of more market participants,which is of great significance to China’s capital market.From a macro point of view,the carrying out of the stock market interconnection system has not only faciliated the progress and advance of China’s capital market,but also provides more investment channels for domestic and overseas investors,accelerates the mutual flow of capital between global capital markets,and further improves the efficiency of social capital utilization.From a micro perspective,investors from developed regions have stronger information processing ability and willingness to govern,and these investors can play an active role in improving the quality of corporate information and governance after entering the A-share market,which will have an impact on the business decisions of enterprises.Consequently,under the background of the continuous promotion of the capital market opening strategy,it has vital assistance and reference significance for the subsequent deep opening to research the economic achievements of capital market opening.A review of the relevant literature reveals that existing studies on the economic consequences of capital market opening can be divided into two levels: macro and micro.At the macro level scholars mainly explore the impact of capital market opening on economic growth,while at the micro level studies mainly focus on corporate information quality,governance level,financing behavior,investment and investment efficiency and corporate innovation,etc.Few scholars have studied in depth the impact of capital market opening on corporate social responsibility.As the core of modern enterprise competition,actively undertaking social responsibility can help enterprises maintain a trust relationship with stakeholders,so that they can obtain more support from external resources,which is conducive to enhancing their market competitiveness;however,on the other hand,the fulfillment of social responsibility has a high degree of uncertainty and the feedback process from stakeholders is slow,which may have a negative impact on the short-term performance of enterprises.In modern joint-stock enterprises,the existence of the principal-agent problem makes the management pay more attention to the short-term performance of the enterprise,so the management’s willingness to fulfill social responsibility is insufficient,and there is short-sighted behavior in social responsibility,resulting in a low level of social responsibility of the enterprise.Then,after the opening of the capital market,it is worth exploring whether listed companies can make full use of the advantages of foreign investors in improving information quality and governance environment to promote the improvement of their own information transparency and governance,and thus the improvement of social responsibility level.Based on this,this paper explores the impact of capital market liberalization on CSR by constructing a multi-temporal difference-in-difference model with the background of the opening of the Mainland-Hong Kong Stock Connect and using the data of Chinese listed enterprises from 2012-2019 as a sample,and obtains the following research conclusions:(1)capital market liberalization has a significant promoting effect on CSR;(2)improving corporate information(2)improving corporate information transparency and inhibiting management short-sightedness are important mechanisms through which capital market liberalization affects CSR;(3)the impact of capital market liberalization on CSR is more significant among non-state owned enterprises,enterprises with low information quality and high financing needs;(4)the above results still hold after a series of analyses such as parallel trend test,PSM-DID,placebo test,exclusion of samples such as cross-listing,and exclusion of samples that were marked by the Mainland-Hong Kong stock connect in the current year.Based on the above findings,this study puts forward the following suggestions: first,the government should adhere to the principle of gradual and orderly progress and continuously promote the liberalization of the capital market,while it should also pay attention to preventing and resolving related risks and increase the supervision of international capital,so that finance can better contribute to the development of the real economy;second,enterprises should not only establish a sound information disclosure system and create an open and transparent information environment,but also make efforts to improve governance level,reduce the agency cost of enterprises,and comprehensively promote the harmonious development of enterprises and society;finally,intermediaries should expand their business scope,increase the training of analysts,strengthen the internal supervision of the industry,establish the compliance awareness of analysts,and improve the efficiency of capital market operation.