Corporate social responsible disclosure and cost of equity capital: Evidence from the Chinese stock market

Bing Li, Xiaomin Pei 2 *

1 Business School, University of Shanghai for Science and Technology (USST) 334 Jungong Road, Shanghai 200093, China; Financial Research Center, Fudan Development Institute (FDDI), Fudan University 220 Handan Road, Shanghai 200433, China

2 Business School, University of Shanghai for Science and Technology (USST) 334 Jungong Road, Shanghai 200093, China.


As one of the most important emerging markets, the Chinese stock market has received more attention from the investors around the world. We focus on the effect of corporate social responsible   disclosure on the cost of equity capital and the information channel that may play a mediating role between corporate social responsible disclosure and the cost of equity capital in the Chinese context. this paper conducted empirical research based on a sample of China Shanghai and Shenzhen A-share listed companies in years 2010–2018.The results showed that: (1) Corporate social responsible  disclosure can reduce the cost of equity capital; (2) Corporate social responsible disclosure can decrease the price synchronization;(3) price in formativeness plays a mediating role. These effects are nearly supported by further tests concerning about environmentally sensitive or non-sensitive firms, state-owned or non-state-owned firms. Tests on the firms registered in the eastern China still show the similar results while tests on western and middle China show no significant  effects of Corporate social responsible  on cost of equity capital, indicating the regional difference.

Keywords:   Corporate Social Responsibility (CSR); cost of equity capital; mediating effect; price synchronization.


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