Corporate Financial Performance,Regional Social Environment And Corporate Social Responsibility

Since the 21th century, with the rapid economic development, corporate social responsibility (CSR) issues have been increasingly outstanding in China. How to effectively promote enterprises to fulfill CSR has become a public focus. The relationship between Corporate Financial Performance (CFP) and CSR is a hot topic in academic field. But most of the studies focus on the impact of CSR on CFP while the studies consider the impact of CFP on CSR are few, and most of them are conducted on enterprise level. Multi-levelled factors influence CSR Performance. This thesis introduces regional social environment factors into the ralationship between CFP and CSR in order to explode the modulating effect of social environment.Based on resource-based theory of firm and institutional theory, this thesis forms an analytical thinking line of "enterprise resources and capacity-environmental expectations and pressure-corporate social responsibility investment". Firstly, I adopt ordinary least square (OLS) linear regression to examine the relationship between CFP and CSR in the overall social environment in China. Secondly, combined with environmental science theory and CSR theory, I choose three sub environments of the social environment which are economic environment, legal environment and credit environment and set environment variables according to the location of enterprises. Then I use hierarchical linear modeling (HLM) regression method to establish two layers of linear regression model in order to respectively examine the modulating effect of regional level economic environment, legal environment and credit environment on the enterprise level relationship between CFP and CSR. Thirdly, I conduct extended test by group regression. Finally, conclusions are summarized and policy recommendations are proposed.The empirical results indicate the following conclusions:(1) In the overall social environment in China, CFP is positively correlated with CSR. The company with better financial performance usually have better CSR performance. It’s more obvious in state-owned enterprises than in non-state-owned enterprises. And it’s more obvious in old enterprises than in young enterprises. (2) The relationship between CFP and CSR is modulated by social environmental factors.1) When in the high level of economic environment, the positive correlation between CFP and CSR siganificantly reduces.2) When in the low level of credit environment, the positive correlation between CFP and CSR siganificantly reduces. Among them, non-state-owned enterprises reduce more than state-owned enterprises and young enterprises reduce more than old enterprises.3) The modulating effect of regional legal environment is not significant.The innovation of this thesis is to add social environment factors to study the relationship between CFP and CSR. In theory, it expands the perspectives of researches on the relationship between CFP and CSR, and it enriches the findings of modulating effect on the relationship between CFP and CSR. In practice, the research findings can help us understand the differences of CSR performance in different regions in China nowadays. And it might have some enlightenment and reference value for policies improvement and helps to form a good social environment where enterprises can better fulfill their social responsibilities.