Analyst Coverage And Corporate Social Responsibility

As an important micro individual in the market economy,the behavior of enterprises has an important influence on the economic development and the social environment.Actively fulfilling corporate social responsibility can not only win competitive advantages for enterprises,but also reduce various risks of enterprises,which is an important source of sustainable development of enterprises.However,with the development of China’s economy,the social responsibility problems such as environmental pollution,squeezing employees and cheating consumers are increasingly emerging.Therefore,it is of important practical significance to explore the influencing factors to promote the performance of corporate social responsibility.Analysts collect information about listed companies and provide investment advice to investors in the form of research reports.Existing literature shows that there are two main motivations for enterprises to fulfill their social responsibility: stakeholder motivation and agent motivation.Under the motivation of stakeholders,the reputation theory holds that enterprises fulfill their social responsibilities mainly to meet the needs of the government,the public and other stakeholders,so as to accumulate reputation capital and help enterprises to obtain scarce resources and other competitive advantages.In addition,as the capital market information intermediary,the supervision and governance role of analysts has been widely recognized by the academic community.Analysts will take the initiative to pay attention to corporate social responsibility information and attract wide attention from market participants through research reports,thus increasing the cost of enterprise violations,promoting enterprises to repair internal control defects and indirectly promoting enterprises to fulfill social responsibility;While the agent motivation argued that managers will sacrifice their shareholders by overinvesting in corporate social responsibility to enhance personal reputation.Analysts’ attention forces managers to reduce CSR investments.Besides,according to the performance stress hypothesis,analysts’ earnings forecasts will put pressure on companies,thus increasing the short-sighted behavior of the managers,putting resources into short-term profitable projects,which ultimately has a negative impact on corporate social responsibility.So whether and how will analysts focus on CSR performance ? This is a topic worth exploring.This thesis is based on the principal-agent theory,information asymmetry,the theory of effective market hypothesis,stakeholders and reputation theory,using a-share listed companies in 2010-2020 data empirical test,research analyst on the relationship between the performance of corporate social responsibility,and discuss how analysts affect the corporate social responsibility.As analysts are concerned about the impact on corporate social responsibility through reputation effect and supervision and governance mechanism,this thesis also further studies the regulating effect of analysts’ own reputation,media attention and internal control on the relationship between analysts’ coverage and corporate social responsibility.After empirical test,the following conclusions are drawn: first,the analyst coverage on promoting the performance of corporate social responsibility;second,the star analyst has a more significant influence on the performance of corporate social responsibility;third,the media attention can promote the impact of corporate social responsibility and positively regulate the impact of corporate social responsibility and play a complementary role;fourth,the internal control promotes the assumption of social responsibility and regulate the impact of the analyst on the performance of corporate social responsibility.After a series of robustness tests,such as replacing variables,constructing "Net analyst Coverage",propensity score matching method,and instrumental variable method,the results remain robust.The conclusion of this thesis enriches the research on analysts’ economic consequences and influencing factors of corporate social responsibility,and provides an empirical basis for analysts’ industry norms and corporate social responsibility performance.