Social Responsibility And Corporate Performance

Corporate social responsibility (CSR) is a controversial subject and many scholarsmade research on CSR from different points of view, such as Economics,Management, Sociology, Law, Ethics etc. From the perspectives of Neo-institutionalEconomics, this paper first proposes that the concept of CSR is the responsibility tomaintain and improve the stakeholders' rights and interests besides the responsibilityto maximize the corporate's profit. Based on this definition, we clearly define theboundary of the stakeholders.Based on the theory of stakeholder, the theory of contract and the theory oftransaction cost, we posit that CSR is an informal institutional choice for stakeholdersto constrain outright pursuit of profitability without regards to social goods by firmswhen both the market and government fail. The paper then hypothesizes that CSRleads to more reputations, higher productive efficiency and better enterpriseperformance.Using data from792non-financial publicly listed firms that have published CSRreports in2009-2010, the paper finds that CSR positively affects firm efficiency by avariety of measurement methods for CSR and different econometric models for CSRand firm porformance.Overall, the results provide important theoretical and empirical support for thegovernment CSR initiatives based on concepts including "Scientific Outlook onSocial Development" and "Harmonious Society"—ideologies that encouragebusinesses to emphasize sustainable development, put people first and look beyondshort-term profits.