The Study Of Relationship Between The Social Responsibility Of Business And Enterprise Financial Performance

In recent years, with the frequent food safety incidents, the destruction of the environment and resources, general public fulfil the social responsibility to the enterprise raises more attention to this problem. Chinese enterprise modernization process accelerated the rapid economic development, at the same time also brings many problems. Enterprise is the most basic unit of social economic activities, it is also an essential part of the social activities, and the healthy development of the enterprise maintains the harmony of economic and social sustainable development. Progress along with the development of the enterprise itself, and gradually realized to perform the social responsibility.it is not only can set up a positive corporate image, but also can maintain stakeholders related to the enterprise, better to improve enterprise’s financial performance.Are enterprises fulfill social responsibility associated with improvement of financial performance of enterprises? If the data can prove that there are positive correlations between two aspects, enterprises have to actively perform social responsibility and duties of the enterprise for their own financial performance.This article based on stakeholder perspective as a starting point, this paper studies the correlation between the social responsibility and financial performance of the listed manufacturing companies in China. First of all, study of dynamic and theoretical foundation of corporate social responsibility and financial performance both at home and aboard. Describes the research dynamic and evaluation method of social responsibility and financial performance; this article also introduces the social responsibility of the relevant derivative theory and stakeholder theory; Secondly, based on the literature arrangement of the correlation between corporate social responsibility and financial performance research at home and aboard, concluded three mainstream views, namely positive correlation, negative correlation, and irrelevant.In the empirical analysis part, combined with the situation of Chinese manufacturing industry, selected the 128 listed manufacturing companies from shenzhen and Shanghai stock market of three years" annual report disclosure data as the basis from year 2011 to 2013, by using index of social responsibility and corporate financial performance of the accounting index method, to measure the correlation between the two aspects. In this paper, primarily emphasis on fulfillment of social responsibility of the corporates in five vital aspects, mainly are the corporate responsibilities to the shareholder of a company, responsibility for creditors, responsible for enterprise employees, responsibility for corporate clients and responsibility for government. Furthermore, there are five indicators in order to measure the social responsibility of the enterprise level such as earnings per share, asset-liability ratio, rate of rights and interests of employees, main business cost rate and tax contribution rate. And three important accounting indexes were selected:return on net assets, net assets, rate and growth rate of total assets as evaluation index of corporate financial performance. At the same time, two assumptions were raised in this article: Hypothesis 1 assuming listed manufacturing companies to fulfill the higher the degree of social responsibility, the company’s financial performance level is higher; Hypothesis 2 the higher the financial performance of listed manufacturing companies, the higher the degree of social responsibility, establish a model for quantitative analysis of the correlation.Results illustrate that corporate social responsibility and financial performance present the positive correlation with two-way among the Chinese manufacturing companies, namely there is a significant positive correlation which the listed manufacturing companies actively fulfill the social responsibility improve the level of enterprise’s financial performance. On the other hand, the higher the level of financial performance provides a solid financial support for the enterprise, promote enterprise better fulfilling social responsibility and also promote the sustainable development of the enterprise. The results verify the effectiveness of the two proposed assumptions in this paper. According to the result of empirical analysis, aiming at the circumstances of the manufacturing enterprise in combination with all aspects of the stakeholders, come up with better policy suggestions in order to inspire enterprise fulfill the level of social responsibility and guarantee the level of financial performance.