Research On The Interactive Relationship Between The Corporate Social Responsibility And Financial Performance

With the deterioration of the natural environment and a series of social problem triggered from the enterprises, the problem of corporate social responsibility has gradually aroused people's concern, more and more enterprises have been requested to take on the CSR. There are lots of corporations beginning to realize that undertake social responsibilities is an efficient way to enhance corporate identity, obtain social capital, and increase the competitiveness. But taking on CSR will increase the cost and affect enterprise's profit. So business's concern focus on whether the enterprise can find the balance between CSR and business performance. Therefore, this paper does some theoretical analysis and empirical research on the relationship of CSR and financial performance, so as to put forward relevant advises and proposals of improving the performance of corporate social responsibility.Firstly, this paper recalls the academics at home and abroad in recent years for the research of the relationship between social responsibility and financial performance. Followed by literature review and evaluation of research, this part evaluates relevant literature and points out the inspiration for writing this article.Then this paper discusses relevant theories of CSR, including stakeholder theory, corporate social responsibility theory, social contract theory and transaction cost theory. It divides corporate social responsibility into seven parts, which are responsibilities to stockholders, to creditors, to internal employees, to customers, to the environment, to public welfare and to government. And then it analyzes their impacts to financial performance theoretically, and draw a basic conclusion of theroristical research. Next, it uses companies in Shenzhen security market as examples, conducts an empirical analysis of the relationship between CSR and financial performance. And then it uses descriptive statistics, correlation analysis and regression analysis to analyze the sample, test the hypotheses, and finally draw a conclusion. The result suggests that: corporate social responsibility is positively correlated to the financial performance. Corporate social responsibility and financial performance are reciprocal causation. In the end, the paper makes some suggestions of how to improve social responsibility performances and relevant information disclosure conditions of the corporations in our country, and put forward some proposals to the future research of this issue.On the basis of the research from the predecessors, this paper has the following innovations:(1) The innovation of research perspectives. In the past years, the researches are mostly about how the CSR affects financial performance. This paper selects a new research perspective, it studies the interactive relationship between the CSR and the financial performance.(2) The innovation of indicators in empirical studies. Most previous studies of CSR and financial performance use intergrated indicators to do the regression analysis. But this paper will divide the index of CSR into seven indexes, and divide the index of financial performance into two indexes. This classification refinement of research methods are also enlightening for future research. (3) The innovation of the new conclusion. In this paper, through the theoretical analysis and empirical testing, it draw a conclusion that CSR and financial performance impact on each other and promote each other. Enterprises fulfill the social responsibility has a positive role in promoting the financial performance, and better the financial performance is, easier the enterprises take on the social responsibility. This conclusin has great significance in promoting the Chinese enterprises to take on the social responsibility and raising awareness of social responsibility.