The Impact Of Corporate Social Responsibility On Stock Repurchase

After the successive issuance of legal opinions and business guidelines on repurchase in 2013,stock repurchase,as one of the important tools in the capital market,began to develop rapidly in China.According to data statistics,both the number and amount of stock repurchases are gradually increasing rapidly.As of 2022,the number of repurchase transactions by A-share listed companies in China reached 1445,with a repurchase amount of 99.295 billion yuan.Under the promotion of the Chinese government,the number of corporate social responsibility reports(CSR)has almost doubled from 2011 to 2021.From the data of stock repurchase and corporate social responsibility,both of them are in a period of prosperity,but few scholars in the academic world combine them to study the impact of corporate social responsibility on corporate repurchase behavior.This paper will study the relationship between the two from the perspective of the Free cash flow hypothesis,which is of great significance in both theoretical and practical levels.In academic research on stock repurchases,there is significant controversy over whether stock repurchases are beneficial or detrimental to companies.Scholars usually believe that the positive correlation between Free cash flow and stock repurchase is in line with the interests of shareholders.This article takes the social responsibility score of a company as a measure of ethical culture,believing that it increases the cost of managers’ selfishness.This article examines whether there is a correlation between corporate social responsibility and corporate stock repurchase decisions.According to the repurchase data of A-share listed companies in Shanghai and Shenzhen from 2015 to 2021,empirical analysis shows that there is a positive correlation between corporate social responsibility and stock repurchase,and corporate social responsibility has expanded the positive correlation between Free cash flow and stock repurchase.After replacing the explanatory variables and models,the regression of this paper is still robust.At the same time,this article found that the relationship between CSR and repurchase exhibits heterogeneity among enterprises in different regions,company sizes,and industry competitiveness.These results indicate that the ethical culture represented by corporate social responsibility plays an important role in repurchase decisions,which may encourage buybacks that align with shareholder interests.In addition,this article further confirms the above viewpoint through positive and negative cases of corporate social responsibility performance,and companies with better corporate social responsibility performance have a higher completion rate of repurchase plans,and the stock market has a more positive market response to their repurchase announcements.Finally,based on empirical and case studies,this article provides recommendations for the government,enterprises,and investors from three perspectives.The government should clarify the reward and punishment mechanism,strictly regulate and regulate measures such as executive equity incentives,encourage enterprises to publish corporate social responsibility reports,and provide appropriate policy support;An enterprise should improve its internal management system,optimize the use efficiency of Free cash flow,and actively assume corporate social responsibility for the society;Investors should play a public supervisory role,safeguard their rights and interests while ensuring a healthy and orderly market environment.