The Empirical Study On The Relationship Between Corporate Social Responsibility And Financial Performance Of China's Food Industry Companies

As the traditional profit maximization theory cannot meet the needs of company's long-term development, taking corporate social responsibility( CSR) has become an increasingly important guarantee and inevitable trend for sustainable development of enterprises, especially for food industry companies. As a special production industry, the products' quality of food companies directly relate to people's physical health and safety.However, there are still many companies evading their social responsibilities to pursue short-term benefits, such as the frequent reports of food and drug safety events. It affects not only the reputation and development of the company itself but also the harmony of society, thus causing huge waste of social cost. All of these acts against laws or moralities result from that the companies know little about the importance of CSR and how CSR affects their financial performance. As an economic organization for the pursuit of profit,economic stimulus from the market is undoubtedly the company's intrinsic motivation to undertake social responsibility. Based on this background,this article attempts to study the relationship between the CSR and corporate financial performance(CFP), thus providing some advises for enterprises and government to establish incentives mechanism for corporate social responsibility.Based on stakeholder theory, this article decomposes CSR into seven dimensions,and empirically researches the relationship between CSR and CFP, respectively from the perspective of the overall CSR and every stakeholder-dimension responsibility. We choose the listed companies in food industry from year 2005 to 2013 as the research samples, by using SPSS21.0 and Eivews8.0 statistical software. The study finds that the corporate social responsibility level of food companies has been improving, but the overall level is low. And the empirical results show that the better the overall corporate social responsibility is, the better the corporate financial performance will be. From the perspective of every dimension of CSR, responsibilities to government, to consumers, to suppliers, to employees, to society, and to stockholders all have a significant positive impact on CFP. But the relation between responsibility to creditors and CFP is not significant. In addition, different market environments will lead to a difference of the relationship; based on this point, this article try to analyze the different impacts of CSR on CFP before and after 2008, result shows that the overall corporate social responsibility before 2008 presents more significant impact on corporate financial performance.