Research On The Effect That Corporate Social Responsibility Has On Financial Performance

With a rapid economic development in recent years, a series of socio-economic problems are emerging in an endless stream, such as food and production safety and tax evasion. What’s more, the conflicts between enterprise development and social advancement are becoming evident day by day. Given this, people increasingly focus on corporate social responsibility and the enterprises in turn give prominence to the effect of social responsibility on their own financial performance.This paper aims to research the effect of corporate social responsibility on financial performance and provide a basis for it. In the end, the paper comes up with strategies and suggestions as to strengthening of corporate social responsibility.This paper firstly conducts a literature review and defines relevant concepts and analytic theory, and illustrates the reason why corporate social responsibility is produced and its mechanism by analyzing supply-demand relationships of corporate social responsibility in different markets and makes a qualitative discussion to the effect of corporate social responsibility that enterprises undertake for different stakeholders on financial performance with the basis of the stakeholder theory. Secondly, the paper raises a hypothesis, designs variables and formulates research models, and then carries out an empirical study based on sample data by utilizing such statistical analysis techniques as descriptive statistics, correlation and regression analysis. Finally, the paper offers suggestions and makes a conclusion and prospects about the study. Furthermore, the paper develops a new style for study that it, premised on different markets, uses the principle of supply-demand and utility from market theory in microeconomics for reference in ways that explore motivation and mechanism of corporate social responsibility and establishes logic connections between corporate social responsibility and financial performance.This paper mainly utilizes three research methods, the integration of theory and practice, qualitative and quantitative analysis and normative analysis and empirical study to investigate the effect of corporate social responsibility on financial performance.The study results show corporate social responsibility overall exerts a positive effect on financial performance and most corporate social responsibility variables have forward influence on financial performance, of which corporate social responsibility undertaken for shareholders shows a more positive effect. From this, the paper presents relevant strategies to vitalize listed companies to proactively fulfill corporate social responsibility.