Research On The Effects Of Corporate Social Responsibility On Operating Efficiency Of Commercial Banks

Firms’ profit-pursuing behavior has caused various economic problems, environmental problems and social problems, which has attracted public attention. All firms are recommended to implement corporate social responsibility. Banking has been playing an important role in the national economy, the corporate social responsibility banks involved in is not only related to the development of banks, but also contributes to the development of national economy. Based on previous studies, firms with higher operating efficiency are willing to be responsible for implementing corporate social responsibility, but there is an argument about the effect of corporate social responsibility on operating efficiency. Managers are short-sighted and propose that implementing corporate social responsibility is at the expense of higher cost that will reduce profit, few studies focus on the effect of corporate social responsibility on operating efficiency. Hence, it is critic for us to uncover the link between the two of them to provide theoretical support for implementing corporate social responsibility of banks.This paper uses a sample of 16 listed banks during 2008-2012 to explore the effect of corporate social responsibility on operating efficiency of commercial banks. First of all, this paper introduces the theories about corporate social responsibility and operating efficiency, and introduces sustainable development theory to elaborate the link between the two of them. Furthermore, we use stochastic frontier analysis model to measure operating efficiency of banks, and the corporate social responsibility is measured by social contribution value per share, this paper explores the relationship between the two of them. In addition, to examine whether there is a continuing financial impacts on operating efficiency, we introduce previous corporate social responsibility value. At last, based on reputation theory, we want to examine the moderating effect of size involve in the relationship between CSR and corporate financial performance.Based on the empirical findings, we found that corporate social responsibility could positively affect operating efficiency, and the positive effect is continuing. Considering the different sizes among banks, the empirical results suggest that city commercial banks involve in the corporate social responsibility can improve operating efficiency compared to state-owned commercial banks.