Relationship Between Corporate Social Responsibility And Financial Performance In The Mineral Industry: Evidence From Chinese Listed Mineral Firms

Chinese mining has experienced rapid development in the past decade, but triggered a series of social problems and violent conflict, such as environmental pollution, accidents, illegal use of land, which affect the sustainable development of the mining companies and reflect a lack of Corporate Social Responsibility. Under the enterprise profit-driven nature, in order to effectively promote Corporate Social Responsibility, we should first clarify the relation between Corporate Social Responsibility and financial performance. The main research contents, conclusions and innovation points are as follows:The main research work includes:(1) first, Corporate Social Responsibility and Financial Performance interaction mechanism were studied, summed up the four hypothesis;(2) analyzed related literature about mining Corporate Social Responsibility evaluation, summarized the characteristics of mineral firm’s social responsibility based on stakeholder theory, combined with the mining of international standards, initiatives, and the domestic leading mining corporate social responsibility report, this paper constructs the Chinese mining corporate social responsibility evaluation index system, including the liability of shareholders, employees, suppliers, customers & consumer rights responsibility, environmental responsibility and the social public responsibility five first-level indicators, 13 secondary indicators and 37 tertiary indicators;(3) The regression model between social responsibility and financial performance are analyzed from various angles using panel data of 228 Chinese listed mining companies in 2010 to 2013 period: unit analysis of correlation between financial performance and Corporate Social Responsibility; different level of the financial performance respond to the correlation of Corporate Social Responsibility and financial performance; Corporate Social Responsibility internal elements on the correlation of financial performance; the differences of the relevance between Corporate Social Responsibility and financial performance in four sub-mineral industry.The main conclusion shows:(1) Corporate Social Responsibility on corporate financial performance impact is limited and not dominant;(2) shareholder responsibility is the only elements which has significant positive correlation between the Corporate Social Responsibility and financial performance, which also explain the phenomenon that mining companies ignore the non-traditional stakeholder responsibility;(3) Chinese mining Corporate Social Responsibility and financial performance in different industries correlativity differences reflected the industry’s own characteristic;(4) empirical study results and the lack of social responsibility are mainly determined by the current mining transition development period in our country, whose environment is not mature.Based on the above conclusion, the paper puts forward the following Suggestions:(1) subdivide the Corporate Social Responsibility. Corporate Social Responsibility with positive relationship with financial performance could be solved through the market solution;(2) social responsibility don’t have significantly relationship with the enterprise’s financial performance would be solved by establishing a new mining development external environment, which forced to corporate social responsibility associated with financial performance, then into their business model.In this paper, the limitations are as follows: the research time period is short. Restricted by data availability, we chose only four years of data from 2010 to 2013 and lack of unlisted enterprise data.