Influence of Corporate Social Responsibility on Financial Performance: A Case Study of over One Hundred Large Enterprises in China

Abstract

This research explores the relations between the two financial performance indexes of return on assets (ROA) and return on sales (ROS) using the index of corporate social responsibility (CSR), and categorizes. It also screens out 150 sample enterprises according to their different ownerships based on the CSR initiative formulated by CSR Research Center, Division of Economics, Chinese Academy of Social Sciences and the materials about performance of enterprises in implementing CSR during 2009-2014. The empirical results of this research show that: (1) a sound responsibility management system can help put in place the communication channels with stakeholders, properly handle disputes in managing CSR issues, and maintain long-term partnership; (2) by implementing market responsibility, enterprises can promote industrial development, advocate the idea of fair competition and system guarantee, and help the whole value chain to yield prominent and continuous benefits; (3) some private enterprises are not aware of the transition of management modes, for they hold that shouldering social responsibility is to cause increased expenditure and ultimately short-term cost expenditure, hence leading to lowering operating income; and (4) the expenditure incurred to enterprises in undertaking environment responsibility behaviors can hardly be responded to in a short term, so it is likely to cause declining financial performance.