Study On Relationship Between Social Responsibility And Economic Performance Of Enterprises

Recent years, with the rapid development of economy, public pay more and more attention to enterprises which fulfill their social responsibility. A growing number of problems of environmental pollution, rights of employees been damaged expose the problem that some enterprises ignore the effect they may have on the environment and society when they are pursuing economic interests. Some enterprises think that they will inevitably bear certain cost when they fulfill the social responsibility, which of course, will conflict with motivation of profit maximization. As a result, they don’t want to fulfill the corresponding social responsibility. Will it be harmful to economic profits when they fulfill corporate social responsibility? Or will it promote economic performance instead? This is the core problem to be discussed in this paper.Based on the stakeholder theory, we select215China’s manufacturing listed companies’data from2008to2012as research samples to discuss whether corporate social responsibility is conducive to improve economic performance. The entire analysis is divided into two parts, theoretical part and empirical part. Theoretical part introduces the current situation of Chinese manufacturing companies and issues when they fulfill social responsibility at first. Then we introduce the stakeholder theory. At last, on the basis of the theory, we analyze the impact on economic performance when manufacturing enterprises fulfill the responsibility to shareholders, suppliers, creditors, customers, employees, government, environment and community separately. In the empirical part, we define corporate social responsibility as the independent variable and enterprise economic performance as the dependent variable. Specifically, social responsibility is divided into six dimensions which are the corporate social responsibility to shareholders, suppliers, creditors, customers, employees, and government. Those six dimensions are represented by six indicators respectively, which are earnings per share, accounts receivable turnover, shareholders’ equity ratio, main business cost rate, employees’profitability ratio and enterprise tax ratio. The enterprise economic performance is divided into financial and market performance parts. Similarly, we set two indicators to stand for them which are return on equity and Tobin Q value. At the same time we select enterprise assets and corporate ownership structure as two control variables. Then we set up two econometric models respectively and use Eviews6.0measurement software to conduct descriptive statistics analysis, unit root test, F test, Hausman test and regression analysis. After that we conclud that when enterprises fufill social responsibility, the economic performance can be improved.Finally, on the basis of the above analysis and conclusion, we put forward some policy suggestions which are to establish the consciousness of social responsibility and strengthen the responsibility management, to carry out the investors’ returns, to safeguard employees’ legitimate rights and interests, to make contribution to the national government actively; to make contribution to protecting the environment actively, to make contribution to the community actively, and to accept social supervision. Through the theoretical and empirical research, we hope to have a a comprehensive knowledge of the relationship between social responsibility and economic performance of manufacturing listed companies. We also hope it will help manufacturing listed companies fulfill the social responsibility actively and set an example to the entire manufacturing industry to implement their social responsibility.