The relationship between corporate social performance and corporate financial performance: Evidence from China

Abstract

The purpose of this research is to investigate how corporate social responsibility (CSR) will influence the corporate financial performance (CFP) for companies in China. We employ index from RANKINS database to measure corporate social performance (CSP), and use return on equity (ROE) to measure CFP. We use multiple regression to measure the relationship between these two variables. Using a large sample of Chinese firms from 2008 to 2017, this paper finds that both CFP and CSP are positively and significantly correlated with each other at p<0.01. The regression results demonstrate that there is a positive, significant and coefficient relationship between Chinese firms’ social performance and financial returns.