Corporate Social Responsibility And Corporate Financial Performance Correlation Studies

With the rapid development of the economy in China, more and more people pay attention to the negative effect caught by economic development rather than GDP. As the core strength of the economy, enterprises are asked to undertake their own social responsibility, like environmental protection, charities and so on.Corporate social responsibility (CSR) in China is still in its initial stage. Many enterprises think that the activities in CSR will increase the cost and reduce the profit, so many of them do not want to carry out the social responsibility. But many study on aboard found that CSR contributed a lot to the enterprises in the long term and could improve the corporate financial performance (CFP). In China, the study concerned a lot on qualitative analysis rather than the quantitative analysis. Therefore, this paper pays a lot of attention to the empirical research, so as to demonstrate the relationship between CSR and CFP based on the data.Firstly, this paper discusses the relevant literature about the definition of CSR and introduces the social contract theory and stakeholder theory. Then this paper reviews the study about the relationship between CSR and CFP, and then discusses how to evaluate CSR and CFP. At last, in the empirical research, this paper evaluates the performance of China’s listed companies on social responsibility and analyzes the relationship between CSR and CFP. And it uses descriptive statistical analysis, correlation analysis and regression analysis to draw the conclusion of the empirical research.The results show that:in the market model, there is no significant relationship between the CSR and stock returns. In the accounting model, the performance on CSR can improve CFP. And specifically speaking, the corporate governance has a positive relationship with CFP, but the influence of environmental protection on the CFP is not very clear, which is related to the specific financial ratios.