Research on the impact of corporate social responsibility information disclosure and corporate innovation in China

Abstract

China started to implement a new system in 2008, asking fractional companies to make public their corporate social responsibility information disclosure. The financial and corporate governance data of Chinese A-share listed businesses from 2007 to 2016 was gathered in order to determine any potential relationships between the mandated corporate social responsibility disclosure system and company patents. According to the two opposite hypotheses of the information hypothesis and reputation hypothesis, the results show that the number of patents of companies surveyed has increased significantly after the implement of the policy of mandatory CSR disclosure. Additionally, after companys patents are separated into invention type patents and utility models, industrial design (non-invention type) patents, invention type patents significantly increase in comparison. This means that the information hypothesis has been supported more. CSR disclosure can effectively alleviate the information asymmetry existed in the internal of the enterprise, increase shareholders confidence, and reduce the problems of corporate financial restrictions. Several robustness tests have proved that the model and conclusions are both steady. This may provide a reference for the government to improve the mandatory disclosure policy further and help improve the capital market development in China.