Research On The Relationship Between Corporate Social Responsibility And Financial Performance Of Chinese Listed Food Companies

In modern society, in order to achieve goals, enterprises pursue profits in the priceof ignoring its relation with the society and sacrificing its relation with otherstakeholders. This short-term goal orientation leads to frequent events of enterprisesdiscriminating employees, neglecting safety of employees, deceiving clients, violatingconsumers’ rights, destroying environment and evading tax. The high frequency ofthese events has brought the topic of corporate social responsibility onto the publicstage. More and more people have started to pay attention to enterprises’ commitmentto taking social responsibility, which also helps strengthening the awareness of socialresponsibility and urging enterprises to fulfill their social responsibility.What exactly is corporate social responsibility? What are the cost and the resultingbenefits of taking social responsibility by enterprises? Does taking socialresponsibility is in line with enterprises’ goals? What is the relation betweencommitting corporate social responsibility and financial performance? These issuescurrently have not been solved yet, the reason is that people have not reached to anunited opinion on corporate enterprise responsibility. At the same time, the content ofcorporate social responsibility differs in different industry and sectors. As a result,simple horizontal comparison in different industry is not appropriate in actual study;moreover, simple intuitive indicators cannot be used in measuring the performance ofenterprises taking social responsibility.Based on this background, this paper selects a particular industry, foodmanufacturing industry, for research. Food manufacturing industry has always beenimportant to people’s daily life. Food safety issues gains people’s most concern as itrelates to people’s most direct and practical interests. Food manufacturing industry issupposed to take more social responsibility. Under the above consideration, this paperbuilds a relationship model between corporate social responsibility and financialperformance, along with the theory of stakeholders, in order to analyze the impact ofsocial responsibility of food manufacturing listed companies’ shareholders, creditors,employees, suppliers, consumers and government on financial performance. On thisbasis, this paper uses the statistics software of stata11.0to take empirical research onthe relation between social responsibility and financial performance of China’s53food listed companies in Shanghai and Shenzhen from2008to2012.The conclusion can be drawn from the empirical research:(1) Food manufacturing industry fulfilling its responsibility to shareholders and governmenthas a significant positive correlation to its financial performance, and has a lag.(2)Food manufacturing industry fulfilling its responsibility to suppliers and consumershas a significant positive correlation to its financial performance.Its lag is notsignificant.(3) Food manufacturing industry fulfilling its responsibility to creditorsand employees does not have a significant impact to its financial performance.(4)Scale has a significant impact on food manufacturing industry. But whether enterpriseis state-owned or state-controlled enterprises has no relation to the impact on financialperformance.Through research combined with theories and empirical probe, this paper aims tohave a comprehensive understanding of the relation between corporate socialresponsibility and financial performance, in the hope of improving evaluation systemof food manufacturing industry and provided help for the correct decision-making ofstakeholders.