Empirical Study On The Relationship Between Social Responsibility And Financial Performance Of China’s Automobile Manufacturing Enterprises

With the development of social responsibility practice and theoretical research in China, more and more enterprises begin to focus on fulfilling their social responsibilities to other stakeholders to unify economic and social benefits while they focus on economic benefits. As China’s pillar industry, automotive industry has a long industry chain with high relativity of industries and has great influence on the development of national economy. However, the fulfillment of corporate social responsibility of China’s automotive industry is still in the initial stage, it is inconsistent with the level of development of automotive industry and needs to be improved and enhanced. The relationship between corporate social responsibility and financial performance has become a hot issue of research for scholars, but they haven’t drawn a unanimous conclusion, and there are few studies on the relationship between social responsibility and financial performance specialized in China’s automobile manufacturing enterprises. Therefore, this paper carries out research on the relationship between social responsibility and financial performance of China’s automobile manufacturing enterprises through theoretical analysis and empirical tests, so as to guide automobile manufacturing enterprises to consciously fulfill their social responsibilities and promote the sustainable development of automobile manufacturing enterprises.Guided by the stakeholder theory, this paper carries out research by using methods of combination normative research with empirical research and combination qualitative analysis with quantitative analysis. Firstly, this paper straightens out and summarizes domestic and foreign literature about the relationship between corporate social responsibility and financial performance and expounds the theories related to social responsibility, then analyses the status quo and the existing problems of China’s automobile manufacturing enterprises about their actions on fulfilling their social responsibilities combining with the characteristics of China’s automobile manufacturing enterprises. On this basis, this paper elaborates the objects and contents of social responsibility of automobile manufacturing enterprises from seven aspects of stakeholders, then analyses the influence of social responsibility on financial performance of automobile manufacturing enterprises based on the stakeholder theory. Secondly, on the basis of theory analysis, this paper takes the panel data of 34 listed companies of automotive industry during 2009-2013 as the sample, uses two accounting indexes——return on assets and return on equity to measure enterprises’ financial performance and selects corresponding social responsibility indexes from seven aspects of stakeholders, makes empirical tests on the relationship between social responsibility and financial performance of China’s automobile manufacturing enterprises by using the fixed effects regression model with Driscoll-Kraay standard error and Stata 12.0, the results show that:(1)For different stakeholders, enterprises’ fulfilling social responsibility has different impacts on financial performance. Among them, fulfilling the social responsibility to shareholders, suppliers, consumers and the government has a significant positive impact on financial performance, fulfilling the social responsibility to employees and the community has a significant negative impact on financial performance while fulfilling the social responsibility to creditors has an insignificant negative impact on financial performance.(2)Corporate social responsibility has more significant impact on financial performance in the current period, and the impact weakens gradually with the extension of the lagging time, corporate social responsibility lagged by two periods doesn’t have a significant impact on financial performance. Finally, according to the empirical results, combining with the status quo of China’s automobile manufacturing enterprises about their actions on fulfilling their social responsibilities, this paper puts forward corresponding policy recommendations from three aspects of enterprises, government and society to promote automobile manufacturing enterprises to fulfill their social responsibilities.