ارزش افشای مسئولیت اجتماعی شرکتی: تحقیق تجربی از مسائل اوراق قرضه شرکتی در چین On the Value of Corporate Social Responsibility Disclosure: An Empirical Investigation of Corporate Bond Issues in China

Introduction The increasing global awareness of CSR has led to a significant increase in the publishing of CSR reports around the world. Trends in CSR reporting naturally raises the following question among researchers: What is the rationale behind this type of disclosure? A strand of literature investigates this issue from the perspective of financing cost. Most former studies in this area focus on the impacts of CSR on equity financing cost and bank loan cost. El Ghoul et al. (2011) and Dhaliwal et al. (2011) find that firms with better CSR scores exhibit less expensive equity financing. Goss and Roberts (2011), Chava (2014), and Du et al. (2015) consistently show that firms with social responsibility concerns or environmental concerns are associated with higher costs of bank debt. Using China market data, Ye and Zhang (2011) document a U-shaped relationship between CSR and the cost of bank debt. Recently, scholars have shown interest in the link between CSR and the cost of debt in the corporate bond market. However, this line of research has produced mixed findings on the CSR effect. Ge and Liu (2015), Attig et al. (2013), and Jiraporn et al. (2014) find that better CSR performance is associated with higher credit ratings and lower bond yield spreads. Menz (2010) documents a weak positive relationship between CSR and European bond spreads. Sharfman and Fernando (2008), in contrast, find that firms with good environmental performance bear higher bond yields but also have higher leverage. These mixed results reflect the contrasting views on the relationship between CSR and the costs of corporate bonds. One question that arises is, in the Chinese corporate bond market, which viewpoint is supported? In our study, we examine the relation between CSR disclosure quality and the costs of corporate bonds using a sample of 344 corporate bonds issued by Chinese public firms over the sample period 2010–2013. Using OLS regression, our results show that firms with higher CSR disclosure quality are associated with lower costs of corporate bonds. Furthermore, we realize that the estimated relation may suffer from endogeneity problems. More specifically, we address endogeneity arising from three different sources. First, the endogeneity may be caused by the reverse causality that runs from bond costs to CSR disclosure quality. Firms with low costs of corporate bonds would be financially sound and arguably less motivated to disclose high-quality CSR reports. In other words, although better CSR disclosure quality decreases the costs of corporate bonds, low bond costs may lower the need to disclose high-quality CSR information. Another potential cause is the omitted variable bias. It is possible that some (measurable or immeasurable) variables may simultaneously affect the costs of corporate bonds and the quality of CSR disclosure. Finally, the disclosure quality may simply proxy for some non-price terms in the bond contract. It is possible that disclosure quality is correlated with some non-price terms in the bond contract, which, in turn, may be correlated with the bond spreads if the interdependence between price and non-price terms is not properly attended to. To address the reverse causality, we use instrumental variable (IV) regression analysis. We also include possibly omitted variables to mitigate omitted variable bias.