Targeted Poverty Alleviation Information Disclosure and Equity Financing Cost

Zhao, Lu; Wu, Xuhan; Wang, Zhitao

doi:10.1080/1540496x.2021.1964950

Cited by 8 publications

(5 citation statements)

References 24 publications

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“…When managers inflate profits through earnings management, they may reduce the readability of Chinese CSR reports, which increases information asymmetry. Complex information disclosure makes investors afraid to invest [ 52 ] and makes creditors cautious about borrowing money [ 53 ]. Following Tran [ 54 ], we construct the indicator of debt financing cost.…”

Section: Empirical Analysismentioning

confidence: 99%

Earnings management and readability of CSR report: Evidence from China

Ren,

Yao

2024

PLoS ONE

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The literature has confirmed that when managers increase profits through earnings management, the readability of annual reports may be reduced Lo (2017), Ye (2018). Whether this conclusion is suitable for Chinese corporate social responsibility (CSR) reports, however, is still unclear. Based on the panel data of 5083 Chinese non-financial listed companies from 2010 to 2019, this paper adopts multiple linear regression to investigate the impact of earnings management on the readability of Chinese CSR reports. The results show that: (1) There is a significant negative correlation between earnings management and the readability of Chinese CSR reports, with the readability of Chinese annual reports as a mediating variable. (2) The negative effect is more significant when companies are not punished for violations, when the internal control index is low, when companies lack ISO14001 certification and when companies do not have independent third-party authentication for Chinese CSR reports. (3) When earnings management just exceeds zero, the readability of Chinese CSR reports decreases. (4) The economic consequences of reducing the readability of Chinese CSR reports are that financing costs are increased and environmental performance is decreased. To improve the quality of information disclosure of listed companies, the recommendations are as follows: First, the government should issue CSR reporting standards to reduce the manipulation of Chinese CSR reports. Second, Chinese CSR reports disclosed by listed companies must be audited by independent third parties to enhance the credibility of the information. Third, the company needs to strengthen its external and internal supervision to reduce the manipulation space for the readability of Chinese CSR reports. This study extends the negative relationship between earnings management and the readability from annual reports to Chinese CSR reports. To prevent investors from detecting earnings management, the readability of Chinese CSR reports may be reduced. At the same time, the study has definitely added value to the existing literature in the domain of CSR.

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Section: Empirical Analysismentioning

confidence: 99%

Earnings management and readability of CSR report: Evidence from China

Ren,

Yao

2024

PLoS ONE

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“…Huang et al (2019) found political pressure from the government was the main driver behind Chinese firms' targeted poverty alleviation spending. On the other hand, other studies on corporate finance discussed the economic consequences of targeted poverty alleviation disclosure from the perspectives of financing constraints (Pan et al, 2021), shareholder wealth (Pan et al, 2021), stock returns (Qiao et al, 2021), equity capital cost (Yi et al, 2020;Zhao et al, 2022), and corporate risk (Chen and Li, 2021).…”

Section: Religion In Chinamentioning

confidence: 99%

“…, 2021), equity capital cost (Yi et al. , 2020; Zhao et al. , 2022), and corporate risk (Chen and Li, 2021).…”

Section: Institutional Background Literature Review and Hypothesis De...mentioning

confidence: 99%

Religious atmosphere and corporate poverty alleviation: empirical evidence from China

Zheng

Tao²,

Jiang³

et al. 2022

IJOEM

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PurposeThis study explores whether religion plays an important role in corporate poverty alleviation. Religious atmosphere affects managers' attitude towards corporate social responsibility (CSR) and then influences corporate poverty alleviation. This study first examines the impact of religious atmosphere on corporate poverty alleviation and then investigates whether formal institutions, such as law enforcement environments and ownership, influence the relationship between religious atmosphere and corporate poverty alleviation behavior.Design/methodology/approachIn 2016, the Chinese government initiated a nationwide campaign aiming to eliminate poverty in China by 2020. The authors conduct empirical tests with data on Chinese listed firms from 2016 to 2020. The religious atmosphere is measured by the number of Buddhist monasteries and Taoist temples within a certain radius around Chinese listed firms' registered addresses. The authors adopt the ordinary least squares (OLS) method for regression and take the two-stage least squares (2SLS) method to address the endogeneity issue.FindingsThe results show a positive relationship between religious atmosphere and corporate poverty alleviation donations. Law enforcement attenuates the positive association between the religious atmosphere and corporate poverty alleviation donations. Religion and corporate poverty alleviation donations have a more positive association for non-state-owned enterprises (non-SOEs) than for state-owned enterprises (SOEs).Research limitations/implicationsThe authors' findings have important implications. First, this study inspires incorporating the ethical value of traditional culture, such as religion, into CSR. Second, the findings imply that informal institutions have a greater impact on corporate decision-making when formal institutions are weak, suggesting that informal institutions should be emphasized when promoting CSR in countries where formal institutions are relatively weak. The study investigates only religious influence on corporate poverty alleviation based on Buddhism and Taoism, but the authors do not examine the impacts of other religions. Future research may examine the relationships between other religions and corporate poverty alleviation in China.Originality/valueThis study illustrates the positive role played by religion in promoting CSR by relating religious atmosphere to corporate poverty alleviation. It fills the research gap between religion and CSR and also contributes to the literature on determinants of corporate poverty alleviation.

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“…Secondly, research on the relationship between social responsibility information disclosure and corporate performance of listed companies. Some scholars believe that enterprises' active participation in social responsibility activities and disclosure of social responsibility information can improve corporate performance [ 14 ], reduce debt costs [ 13 ] financial costs [ 15 , 16 ], alleviate corporate financing constraints [ 17 , 18 ], and improve investment efficiency [ [19] , [20] , [21] , [22] , [23] ] and corporate reputation [ 18 , [24] , [25] , [26] ]. On the contrary, some scholars believe that non-financial information disclosure, such as social responsibility, can cover up bad behaviors such as earnings management of enterprises to a certain extent [ 27 ] and aggravate the degree of earnings management of enterprises, leading to high short-term operating costs, which in turn can have a negative impact on business performance [ 28 ].…”

Section: Introductionmentioning

confidence: 99%

The influence of work safety information disclosure on performance of listed companies in high-risk industries: Evidence from Shenzhen stock Exchange

Zhang,

Liu,

Mei

et al. 2023

Heliyon

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Targeted Poverty Alleviation Information Disclosure and Equity Financing Cost

Cited by 8 publications

References 24 publications

Earnings management and readability of CSR report: Evidence from China

Earnings management and readability of CSR report: Evidence from China

Religious atmosphere and corporate poverty alleviation: empirical evidence from China

The influence of work safety information disclosure on performance of listed companies in high-risk industries: Evidence from Shenzhen stock Exchange

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