Research On Internal Control Quality,Corporate Social Responsibility And Corporate Performance

In 2018,due to turbulent economical situation and large economic downward pressure,and after America launched the trade war,the manufacturing industry in China was strongly impacted and grew at a slower pace.Against such a grim external environment and the context of economic “new normal”,China's manufacturing industry was trying to improve the corporate performance.Meanwhile,accompanying social problems emerged one after another,such as environmental pollution,excessive consumption of resources,financial fraud,commercial fraud and food and drug safety problems.Many scholars attributed these problems to the following two aspects.First,enterprises seeking quick success and instant benefits did not bear their social responsibilities,second,enterprise's internal control system failed to play its functions of risk prevention,supervision,and error correction,eventually leading to a discredited enterprise and declined performance.Therefore,the relationship among internal control quality,corporate social responsibility and corporate performance has attracted attentions of theoretical and practice cycles.However,since the selected samples and research methods are different,they have not reached a consensus,and thus the research of this paper is still of great significance for clearing up the relationship among the three.This paper,based on theories of information asymmetry,principal-agent,stakeholder and hierarchy of needs,studied deeply the influence mechanisms of internal control quality on corporate performance,internal control quality on the fulfillment of corporate social responsibility,and the fulfillment of corporate social responsibility on corporate performance,as well as the mediating effect of corporate social responsibility played in the process of internal control quality affecting corporate performance.It clarified the logical relationships among internal control quality,corporate social responsibility and corporate performance,and complemented the literature for relevant research.What's more,according to the differences of equity nature,the paper divided samples into two groups,namely,group of state-owned enterprises and group of non-state-owned enterprises.The mediating effect of corporate social responsibility of the two groups was tested respectively.Finally,the paper analyzed the reasons why enterprises with different equity natures have different corporate social responsibility mediating effects,which is also one of the innovations of this paper.On that basis and by integrating qualitative and quantitative research methods,this paper first reviewed pertinent literature,and put forward research hypothesis based on analysis of theoretical basis.It chose 404 A-share listed manufacturing companies in Shanghai and Shenzhen from 2013-2017 as the research samples,designed variables and constructed model,and conducted empirical analysis on the constructed model with software of SPSS18.0 and E-views7.0.Conclusions are as follows:(1)There is a significant positive correlation between internal control quality and corporate performance;(2)the higher the internal control quality,the better the fulfillment of corporate social responsibility;(3)better fulfillment of corporate social responsibility leads to better corporate performance;(4)corporate social responsibility has certain mediating effect in the process of internal control quality affecting corporate performance,and the effect is more obvious in non-state-owned listed enterprises.Finally,based on empirical research findings,the paper put forward targeted advices for improving enterprise internal control and promoting the fulfillment of corporate social responsibility respectively,providing helpful reference for other companies seeking to improve corporate performance.