An Empirical Research On Relationship Between Financial Performance And Corporate Social Responsibility

The problems of product quality, production safety, environmental pollution, corporate integrity are becoming more and more at the times of China's rapid development, such as the melamine incident, Wangjialing mine incident, and corporate social responsibility has become increasingly concerned by all walks of life. All these incidents revealed that the company did not recognize the importance of social responsibility, manager's sense of social responsibility was weak, and the manager's sight of corporate strategy was short. At the same time, the communities called for corporate social responsibility more strongly, so business managers have to rethink the social responsibility. What's more, performing corporate social responsibility can contribute to the establishment of a harmonious society in China.There are different points at the issue of performing corporate social responsibility, because enterprises'situations and the consciousness of manager are different. Some believe that performing social responsibility leads to higher operating costs, which is bad to the company's financial performance. And some think that performing corporate social responsibility is good for sustainable development, which can improve corporate financial performance. Is the corporate social responsibility is related with financial performance, is the better corporate social responsibility good for the financial performance, how to fulfill the social responsibilities better......., All these problems have gradually become the focus of concern? The research system of domestic social responsibility is not mature and the research between CSR and financial performance is beginning. This thesis ensures the relationship between the financial performance and social responsibility through empirical analysis, which can guide performing corporate social responsibility. This thesis illustrates the relationship between CSR and CFP by theoretical analysis and empirical analysis on base of the previous research of domestic and international social responsibility, and then put forward the advices. Firstly, we illustrates background and destination, and then review the literature about the relationship between social responsibility and financial performance. Secondly, we describe the stakeholder theory based on social responsibility, cost-effective theory based on social responsibility, strategic management theory based on social responsibility. And the major theory is the stakeholder theory based on social responsibility. We divide the stakeholders into shareholders, creditors, employees, suppliers, consumers, government, environment and community. And put forward the hypothesis by theoretical analysis and the empirical analysis. Thirdly, we analyze relationship between social responsibility and financial performance on the base of the theory, and put forward the hypothesis of this thesis. Return on total assets and total assets turnover are selected to measure the financial performance, and the social responsibility is measured by social Responsibility Index which Shanghai National Accounting Institute issued at 2007.Through the empirical research, we find that the conditions of performing social responsibility of state-owned enterprises are not well, make sure that performing social responsibility can promote the financial performance in current period and financial performance in lagging period, and verify the positive correlation between corporate social responsibility and the financial performance. At last, we put forward the relevant advices according to theoretical analysis and empirical analysis.Through the above theoretical analysis and the empirical analysis, the fulfillment of corporate social responsibility can improve the financial performance, which can guide enterprises to put more resources into performing social responsibility.