Research On The "insurance Effect" Of Corporate Social Responsibility On Corporate Value Under The Exposure Of Corporate Environmental Violations

Corporate social responsibility(CSR)is becoming more and more important in the practice of enterprise management and has received much attention in the literature of enterprise strategic management.In related studies,some scholars have proposed the“insurance effect” of CSR on corporate value based on the background of western developed markets.They argue that previous CSR efforts can create reputation and moral capital for a company,which can provide a much-needed boost when negative events come to light.However,most of the relevant researches are carried out in the background of western developed countries.China’s stock market is dominated by individual investors,while western developed countries are dominated by institutional investors.Moreover,due to differences in cultural and socio-economic development,investors in China and other emerging markets may have completely different reactions to CSR participation from investors in developed economies.Therefore,it is necessary to examine the insurance effect of CSR in the context of developing countries such as China.It is necessary to test the existence of CSR insurance effect against the background of negative events.In previous studies,various types of negative events were mostly packaged together for research,and a few scholars conducted research on specific events of a specific type.However,research needs to look at more targeted and specific types of events,as this is important for clarifying the breadth of the impact of CSR insurance effects.Based on this,this paper takes the negative event of corporate environmental violation as the context to test the insurance effect of CSR.This is because the current environmental situation in China is grim.The government is constantly improving the law enforcement/supervision of environmental protection,and the public’s awareness of environmental protection is gradually increasing.Therefore,it is of great practical significance to test whether CSR can mitigate investors’ negative reactions after exposure of environmental violations in the Chinese context.In addition,due to the complex information in the market,it is difficult for investors to fully absorb and effectively transform information,so as to rely on other subjects in the market with information transmission function to achieve information reception and transmission.Therefore,investors’ views on corporate behavior may be affected by other stakeholders with information transmission function.We believe that enterprises that are highly concerned by stakeholders have a higher visibility of social responsibility and are more likely to receive positive social responsibility responses from investors.Therefore,the insurance effect of social responsibility is amplified.Therefore,we further examine the influence of the attention of the media and analysts,two key external stakeholders of the company,on the effect of CSR insurance.Based on the reputation theory,attribution theory and stakeholder theory,this paper takes Chinese listed manufacturing companies as the research object,and manually collects and collates the data related to environmental violations of Chinese listed manufacturing companies from 2015 to 2021,finally obtaining 267 samples observed for 183 companies.After empirical regression,the following conclusions are reached: First,after the exposure of corporate environmental violations,the previous efforts of enterprises in social responsibility can effectively reduce the negative reaction of investors,supporting the existence of the effect of corporate social responsibility insurance.Second,after the moderating effect test of media attention and analyst attention,it is concluded that when the media and analyst attention is higher,the insurance effect of CSR is stronger.Third,after further analysis,it is found that the environmental dimension of CSR also has an insurance effect,which can protect the value of enterprises after exposure of environmental violations.The insurance effect of CSR only exists in a relatively short period of time after the exposure of environmental violations,and in the long term,the insurance effect disappears.The research results of this paper have important theoretical contributions and practical enlightenment.Theoretically speaking,first,the research results show that CSR can protect corporate value in the face of environmental violations;Secondly,in terms of mechanism,this paper introduces two factors that regulate the effect of CSR insurance: media attention and analyst attention.Third,this study adds to the literature on corporate social responsibility based on the Chinese context.In practice,this study calls on corporate managers to develop effective CSR strategies and make full use of media and analysts to disseminate their CSR results,so as to protect corporate value after negative events such as environmental violations are exposed.In addition,the government should ensure the effective implementation of environmental laws and regulations,increase penalties,and prevent enterprises from using social responsibility to evade due punishment.