Disclosure for whom? Government involvement, CSR disclosure and firm value

This paper investigates the roles of market and government in an emerging economy. By examining 2906 CSR reports from Chinese listed firms, we find that CSR disclosure adds incremental value to firms, especially for Private-Owned Enterprises (POE). We also find that the disclosure saves Central Government Controlled State-Owned Enterprises, which mandatorily disclose CSR information, from negative news report and litigation risks. This insurance effect is significant in POEs only when they suffer from economic losses. We find that POEs are market oriented; although government would compensate for other mandatory disclosure firms when they suffer from reputational shock.