The Study On The Impact Of Social Responsibility On Financing Constraints Of Companies

"Financing dilemma" is a critical issue for domestic enterprises in the developing process,and the financing constraint has been difficult to be circumvented for a number of years.In addition,with the occurrence of frequent events of product quality and reliability in China in recent years,dairy companies in general,and the implementation of social responsibility in the context of the lack of financing difficulties,the issue of product quality and safety has increasingly become a fundamental issue in the discharge of their social responsibility.Along with the speedy development of economic standards,corporate social responsibility(CSR)has become an essential benchmark for the assessment of enterprises by various stakeholders,and is of vital importance for instructing enterprises to effectively allocate funds.In spite of the abundant research on CSR and financing constraints,the extent of financing constraints of many firms in China has not been ameliorated.This research paper employs a case study to further investigate the impact of corporate social responsibility performance on financing constraints on the basis of information discrepancy theory,theories of transmission of signals,and theories of stakeholders,and enterprise reputation theory,using Bright Dairy,one of the major dairy companies,as the research topic.First,this paper analyzes the current state of social responsibility fulfillment,exogenous financing and endogenous financing of Bright Dairy based on its corporate figures.Secondly,based on domestic and overseas studies,the paper reaches a reasonable expectation that the relation between CSR and financing constraints is a negative relationship between the CSR performance level and the financing constraints.Based on this prediction,this research paper uses statistically analyzed data to carry out a multivariate linear Regression analysis on a sample of 13 dairy companies with similar product categories and operations models,including Bright Dairy,from 2010 to 2021.The results revealed that the level of corporate social responsibility fulfillment was significantly negatively correlated with their financing constraints,as anticipated in this paper.Then,under the guidance of the analysis results,this paper presents a longitudinal comparison analysis of CSR disclosed information and corporate reputation changes from the viewpoint of the "serial quality incidents" caused by the lack of CSR implementation.The paper analyzes the impact of CSR compliance on financing constraints from the perspective of CSR disclosure and corporate reputation movement.On this basis,this paper uses cross-sectional comparative analysis to determine the impact of CSR compliance on financing constraints by selecting companies in the dairy industry with similar size,operating model,and CSR compliance-Yili and Mengniu Group-and further validate the inverse relationship between CSR compliance and financing constraints.The paper further confirms the backward relationship between CSR compliance and financing constraints.The paper concludes by analyzing the results of the implementation of social responsibility in Bright Dairy on financing constraints from the point of views of both stock financing and loan financing.The above study leads to the following observations:(1)The issue of financing discipline exists in the domestic dairy industry,and the overall awareness of social responsibility compliance is still lacking,and there is room for more pronounced enhancement.(2)There is a clear negativity between the degree of social responsibility fulfillment and financing constraints.(3)CSR disclosures and reputation enhancement are indeed effective ways to mitigate financing constraints.Based on the above mentioned findings,this paper makes recommendations for improving social responsibility and easing financing constraints from the internal perspective of corporations,and from the perspective of the government and NGOs,etc.