Corporate Social Responsibility Cost And Operating Performance Correlation Research

With higher economic development and clear contradictions between the corporate social responsibility(CSR) and the economic benefits,The CSR has been regarded as a major research subject by academia and practical circle in western countries. However, the research on the corporate social responsibility starts in 1990s, and the scholars in China begin to pay close attention to the perform of the corporate social responsibility in the economic global background.SA8000 is an auditable certification standard approved by the Social Accountability International (SAI).Therefore, if the corporate in China enter into the global market, the SA8000 is a prerequisite. When the People Republic of China is founded, our economy is scattered, and the restore and the development of it comes first. As the implement of the reform and opening up policy, the economy in China develops at high speed. At the same time, the business activities of the firms focus on profit and tend to reduce social responsibility cost which will lower the profit. The CSR has been the focus of all the fields, as the negative issues such as the gradually apparent problems between the corporate and the nature, society, the food safety, pollution, wastes of resources and so on. The proposal to strengthen the legislation of the corporate social responsibility, which is put forward in the Fourth Plenary Session of the 18th Central Committee of the CCP. It lays the foundation to build perfect social responsibility legal system and drive the CSR to a new level, that is, the companies must obey the CSR. Cost of corporate social responsibility refers to the resource price that the corporates fulfill the economic,legal, moral and charitable responsibility for the stakeholders. A well acknowledged definition on the social responsibility and the cost of corporate social responsibility has not been defined by the scholar, who has undergone the study for almost ten decades, even though the concept" social responsibility" has been proposed. The revalance between the CRS and business performance has three types:positive, negative and uncertain. But the academics and the professional circles believe that the perform of the social responsibility is a necessity.The supporters of the Social Contact Theory think that the contacts between the firms and the society are visible or in visible. The visible ones are based on the contact terms which associates with the enterprises and the stakeholders, creditors and the staff, while the ones which are related to the consumers, government, and the community, based on ethics and the provisions, are invisible. When the corporates’social responsibility does not meet the expect ion of the stakeholders, the stakeholders will put pressure on the corporates by legislation, with drawal of the resources and criticism. So the social responsibility will be actively fulfilled.Based on the documents and the theory referred, and by analyzing the internal and external factors of the social responsibility cost, two hypothesis is come up with: The first one is the cost of CRS will contribute to the advance of the business performance. And the next one is the political and public pressure that the corporates bear will expand the positive effect, while the pressure from the creditors will have an negative effect on the two sides above.Based on a sample of 1121 listed companies that existed before 2010 in Shanghai and Shenzhen,and with the related financial data of this sample during the period 2010 through 2014 being regarded as the observed value,this essay calculates the comprehensive evaluation index of social responsibility cost, and by constructing multivariate regression model to conduct demonstration test of hypothesizes, thus drawing conclusions as fellows:(1)The more spends on social responsibility cost that the enterprise investment, the higher operating performance of enterprises that will be, that is the social responsibility cost of enterprises has positive impacts on its operating performance.(2)The political pressure enterprise are under which from the government agencies does not significantly promote or weaken the relevance between social responsibility cost and operating performance. (3)The corporates,exposed to the media and the public scrutiny, will face tension from the public opinion, in the era of information which flows fast. The more pressure form the public opinion the corporates takes, the positive effect the cost of CRS on the business performance will be more apparent.(4)When the pressure from the creditors on the corporate is increased, the positive effect will be lowered, which means, the growth of the operating profit will decline as the cost of CRS is added. This essay is made up of six parts.The first part is the Introduction. In this part, it mainly introduce the background, importance, content, the thinking and innovation of the essay, all of which will make the readers know why the questions referred and how to work out them.The second part is literature review. The readers could clearly understand the development of the topic at home and abroad, based on the collection, review and making comment on the relevant documents.Then comes the third part, which is about the theory of the CSR, The part firstly expounds the definitions of Social Responsibility Cost and Business Results. Besides, some related theories, for example, stakeholder theory, Social Contact Theory, Legitimacy Theory, Theory of Public Pressure, and Sustainable Develop and so on.The fourth part is the design of the empirical research. In this part, on the basis of theoretical analysis, the research hypothesis is put forward in this paper. After some variables on social responsibility cost,business performance, and public pressure as well as the control variable, the instruction is made on how to screen the sample according to the model of empirical testing.The fifth part is the Empirical Analysis. The author has utilized the statal2.0 to make hypothesis testing and depicted the maximum, minimum,mean and median of some variables. And by analyzing the relevance of the research data and the final regression, and making the establishment of robustness analysis, the reliability of conclusion is guaranteed.In the sixth part, is the conclusion and suggestion. In the view of the conclusion made, some suggestions are put forward for the enterprises.