Time: Start from 14:00, May 29, 2014 (Thursday)

Venue: Room 503, Starr Building

Moderator: Dr. Xin ZHANG

Speaker: Ming Yi HUNG  (The Hong Kong University of Science and Technology) 

Title: Mandatory CSR Disclosure and Shareholder Value: Evidence from China 

Profile of the speaker: http://www.bm.ust.hk/~acct/staff/acmy.html 

Abstract: This paper examines the effect of mandatory corporate social responsibility (CSR) disclosure on shareholder value in China. Using a difference-in-differences design, we find that firms with mandatory CSR reporting experience a decrease in Tobin’s Q and return on equity after the mandate. We also find that stock markets react negatively to announcements of the CSR mandate for the mandatory CSR reporting firms. Consistent with the notion that the CSR mandate increases operation and cost burden, we find that mandatory CSR reporting firms have higher input cost and lower capital expenditure after the mandate. Furthermore, the negative effect of mandatory CSR reporting is more pronounced among firms that are expected to enjoy less net benefits of CSR activities, including firms in high polluting industries, with non-consumer products, and lower reliance on political networks (i.e., firms with weaker political ties, lower government ownership, and stronger provincial market and legal development). Overall, our evidence suggests that ‘government-led’ CSR activities impose a social/political burden on business activities at the shareholders’ expense.