Research On The Relationship Between Corporate Social Responsibility And Financial Performance

If the implementation of corporate social responsibility and corporate pursuit of profit goals are in conflict.The key issue that enterprises concern is how to balance the relationship between them.Existing research had shown that fulfilling social responsibility does not necessarily bring profits to the enterprise.The impact of corporate social responsibility(CSR)on financial performance depends on corporate capability,the relationship extent is not alike at different stages of life cycle.It is a question worthy of researching what CSR influences financial performance,and the level of CSR impacts on financial performance in different cases of firm maturity and corporate capacity(research and development capability,marketing capability and operational capability).In this paper,the listed Chinese companies of the pharmaceutical manufacturing industry are taken as the object of study.The author collects data from 2010-2015 then uses the regression analysis method to test the impact of corporate social responsibility on financial performance in different life cycle stages,corporate capabilities regulate the impact of corporate social responsibility on financial performance.The main research works and innovative achievements of this paper are as follows:First of all,on the basis of the existing research,the sample is divided into growth period sample and mature period sample based on the life cycle theory.It is concluded that the positive impact of CSR on financial performance is more significant in the growth period through comparative analysis.Secondly,on the basis of previous studies,the key variable of firm maturity is introduced.The adjustment of corporate maturity to the relationship between CSR and financialperformance is explored at different stages.In the growing period,firm maturity is positively regulating the impact of corporate social responsibility on financial performance;however,firm maturity negatively regulates the positive influence of corporate social responsibility on financial performance in the mature period.Finally,few of the existing research considered the role of enterprise capacity in the process of CSR's impact on financial performance.This paper introduces the important factor of corporate capability and divides the corporate capability into research and development capability,marketing capability and operational capability from the functional point of view.In the same time,it researches the moderating effect of the three aspects of corporate capability on the relationship between CSR and financial performance.The following conclusions are drawn:(1)In the growing period,the regulatory role of R&D capability between corporate social responsibility and financial performance is not significant;In the mature period,the R&D capability could significantly adjust the positive influence of corporate social responsibility on financial performance.(2)In the growing and maturity period,marketing capability plays a positive role in adjusting the positive effect of corporate social responsibility on financial performance and the marketing capacity of the regulatory role is more significant in the mature period.(3)In the growing period,the regulatory role of operational capability between corporate social responsibility and financial performance is not significant;But the operational capability could significantly adjust the positive influence of corporate social responsibility on financial performance in the mature period.