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Inaugural Professorial Lecture, Professor Jing Shi. Mandatory CSR Disclosure and Information Asymmetry: Evidence from a Quasi-natural Experiment in China
The RMIT Inaugural Professorial Lectures has been established with the broad aim of promoting and celebrating the academic reputation of newly appointed and newly promoted professorial academic staff.
Professor Jing Shi from the School of Economics Finance and Marketing, College of Business will deliver his lecture on: Mandatory CSR Disclosure and Information Asymmetry: Evidence from a Quasi-natural Experiment in China.
Using a quasi-natural experiment that mandates a subset of listed firms to issue corporate social responsibility (CSR) reports, this lecture examines the effect of mandatory CSR disclosure on market information asymmetry in China, where we estimate information asymmetry using high-frequency trade and quote data.
We find that contrary to the criticism that mandatory CSR disclosure lacks credibility and relevance in emerging markets, mandatory CSR reporting firms experience a decrease in information asymmetry subsequent to the mandate. In addition, the decrease in information asymmetry is more pronounced among firms with greater political/social risks, poorer information environments, and better CSR reporting quality.
Additional analyses suggest that relative to mandatory CSR disclosure, voluntary CSR disclosure is part of a firm’s political/social strategy and has higher CSR reporting quality. However, the effect of voluntary CSR disclosure on information asymmetry is limited unless CSR reporting is widespread.