A Empirical Study On The Relationship Between Corporate Social Responsibility And Corporate Financial Performance

Recently, the social responsibility has obtained recognition and attention in our country, which in fact has already been widely discussed outside the country since last century. The research was based on the expectation that as people are getting more and more concerned about the relation between the enterprise and society, there is a need to figure out the relation between the social responsibility of the enterprise and its economic benefits.Founded on various theories and practices summarised from relevant studies by worldwide scholars, the research attempted to set up a quantizable and comparable evaluation system for the social responsibility in the enterprise, since the quantizable outcome should place a foundation for further study in the connection between social responsibility and financial performance. The demonstration was conducted through studies in the property theory, context analysis and statistics, which was initiated from stakeholders’social responsibility theory.The structure of the research was as follows:Chapter 1 was an introduction, mainly focused on the sources of the research and relevant facts. This provided a theoretically and realistically meaningful direction for the next stage of the research.Chapter 2 was a literature review of refined ideas extracted from relevant documents. The summary focused on four aspects:the definition of the social responsibility, the valuation techniques for the social responsibility, the valuation techniques for the enterprise performance, the relations between social responsibility and financial performance.Chapter 3 was the basics of the social responsibility theory, which summarized certain social responsibilities that were research-needed and built upon the stakeholder theory. Chapter 4 was a practical framework for the social responsibility valuation system, which was designed to fit the realistic complexion in our country and also came up with two hypotheses after the design of the framework. Through practical inspection of the hypotheses, relativity analysis and regression analysis in statistics, the research ended up with a conclusion that there is a positive and mutually influential relation between the two.Chapter 5 was-a conclusion and expectation, which contained a summary and presentation of the whole study outcomes and drawbacks, as well as an expectation for the future studies and relevant strategic advices.The main contribution of the research was:(1) Proposed a new index measure system of social responsibility. Based on the improved "content analysis" through stakeholder theory, the paper calculated the weight of the value of stakeholder contribution. And then calculate the measurement of corporate social responsibility indicators of the overall score by the formula of CSR=∑wiαi(2)Through conducting practical research, the relation between the social responsibility and the enterprise financial performance could be elicited as not only a positive one, but also a mutually influential one.(3)The practical research selected the years after the newly revised accounting standards have been brought into effect in China, which enabled a validation of the relation between the social responsibility and the enterprise financial performance based upon the newly revised accounting standards.There were also drawbacks in this research:Firstly, the sources of the targeted data were too simple to obtain any related data outside the scope of financial statements; secondly, accounting indexes were selected instead of market profitability indexes; thirdly, the span of time was relatively short.