Empirical Research Of The Relationship Between CSR Performance And Financial Risk

With the rapid development of China’s market economy, the company’s influence is growing. Especially there have been many negative events about ignoring social responsibility recently, such as Sanlu milk powder incident, Vanke donations scandal, and Min-metals sewage violations, etc. These negative events results in the collapse of many famous brands of large companies in a very short period, greatly increasing the risks companies facing and having serious impacts on people’s livelihood. Therefore, people pay more attentions to corporate social responsibility issues, as what is corporate social responsibility (CSR) and its impact on the enterprise, these issues become a topic of concern and become a focus of academic research.Through reading a lot of literature then summarizing and analyzing the previous studies about corporate social responsibility issues, we can found that, foreign scholars conducted research earlier and more extensive, including several major research areas:the concept of CSR, the measurement method of CSR and the relationship between CSR and corporate financial performance or business value. Though sometimes they used risk (either accounting or market risks), but only as a adjustment factor of the company’s financial performance. In China, the research start late, and mainly use foreign research methods in Chinese corporate, there is a big gap with foreign countries.According to the Stakeholder Theory, Exchange Cost Theory, Signal Transmission Theory and Social Responsibility Investment,this paper uses financial accounting, statistics and econometrics techniques to Chinese listed companies as samples, make a research of the relationship between CSR performance of employees, government, shareholders, creditors, social and environmental the five areas of stakeholders interests as well as their overall level of performance and corporate financial risk from risk perspective directly. Then, based on the non-ST company panel data of A-share listed companies in Shanghai and Shenzhen from year2008to year2012. The regression test results support the basic assumptions presented in this paper, the conclusion of this paper is:(1) Corporate financial risk and corporate responsibility for various stakeholders is a negative correlation, ie, the more contribution rate for each CSR stakeholders, the smaller financial risks.(2) The the overall level of corporate social responsibility performance and corporate financial risk is also a negative correlation; There is a significant negative correlation between Financial risk measured by the asset-liability ratio and F models of the sample and corporate social responsibility performance measured by the social contribution rate.In the last, according to the research conclusion, this paper presents future prospect for its researches and policy recommendations to promote the performance of corporate responsibility for our society.