Empirical Analysis Of Social Responsibility And Stock Market Performance In China

In the early 20th century Western countries have begun to gradually deepen their understanding of corporate social responsibility, at the same time the research about social responsibility has been deep carried out and continuous innovation. Affected by these, China have begun to researching in the field of social responsibility and achieved a certain level of development in the late 1980s. In January 1st 2006 China promulgated a new COMPANY LAW which explicitly requires companies to commit social responsibility. The thinking of social responsibility has begun to cause widespread concern.The focus of this paper is on the relationship between the Corporate Social Responsibility and the stock market performance. First of all, the paper comes from the stakeholder theory and divides the corporate social responsibility according its involved stakeholder; secondly consulting the definition of indicator of social contribution by the Ministry of Finance and combining the predecessors' research experience we designed the social contribution rate of indicators to measure the companies' various social performance; finally we use the China's manufacturing companies for the samples to study the relevance between the various types of social responsibility and stock market performance and to study these difference between the companies in Shanghai Exchange and Shenzhen Exchange. Empirical analysis result in that: first, there is a difference between the relevant of the various types of the companies' social responsibility and the performance of the stock market. The Government's social performance and the social responsibility to employees are positively correlated to the companies' stock market performance, and we can't found the relevance between the social responsibility of the investors and the suppliers and the performance of the stock market. Second, there is a significant difference about the relationship between the companies' social responsibility to the companies' market performance in Shenzhen Exchange and Shanghai Exchange. Embodied in, in Shenzhen the government's social responsibility is positively correlated to companies' stock market performance; in Shanghai the employee's social responsibility is positively correlated to the companies' bstock market performance.