Share pledging of controlling shareholders and corporate social responsibility disclosure

Abstract

This paper employs a large sample of A-share listed firms in China from 2011 to 2019 to examine whether controlling shareholders strategically improve corporate social responsibility disclosure under the unique situation of share pledges. The result indicates that controlling shareholders’ share pledging is positively associated with corporate social responsibility disclosure. The mechanism analysis demonstrates that the corporate social responsibility disclosure level increases when the firm’s stock price approaches the liquidation line. This finding indicates that controlling shareholders use strategic social responsibility disclosure for risk management after pledging their shares; however, controlling shareholders focus on improving the comprehensiveness of disclosure content rather than its credibility and standardization.