Research On The Impact Of Corporate Social Responsibility On Corporate Performance

Recently,Corporate Social Responsibility attracts more and more attention from enterprises and the society.How the Corporate Social Responsibility affect the firm’s financial performance is the crucial question to encourage firms taking the responsibility.This thesis studies the relationship between Corporate Social Responsibility and the financial performance in the Chinese listed companies.And further study on the manufactory industry is explored.In thesis,I select Return on Equity as independent variable and the data of Corporate Social Responsibility disclosed by Runling website as dependent variable,applying the Fixed effect model,the Random Effect model and GMM Model to study this relationship between the all industries sample and manufacturing industry sample.Through empirical research on the all industries sample and the manufacturing industry sample.I find that,for all industries,the lag 2 years of Corporate Social Responsibility has a significant positive effect on company financial performance.The effect of current year’s responsibility is not significant.For the manufacturing industry,the current corporate social responsibility has a significant negative impact on corporate financial performance.In order to further study the difference between the whole industry and manufacturing industry,I subdivide the manufacturing industry into two different sub samples according to ―the Guidelines of Division of Heavy Contaminative Industry‖ issued by the Ministry of Environmental Protection of Chinese.And then I do the same regressions as above.Results show that in subsample with heavy pollution,Corporate Social Responsibility has negative effect on company financial performance.For the subsample that not that heavily polluted,such effect is positive.Therefore,this paper argues that Corporate Social Responsibility contribute to all industries,in the long run.Taking Corporate Social Responsibility brings good reputation and better performance.But for the heavy polluted manufacturing industry,taking Corporate Social Responsibility is a cost.The manufacturing industry is currently in the special period of technological transformation and environmental regulation.Being responsible for innovation and pollution increases cost and decreases the profits.