An Examination of the Relationship between Corporate Social Responsibility and Financial Performance: The Case of Chinese State-Owned Enterprises

Abstract

Research in the field of corporate social responsibility (CSR) has grown exponentially in the last few decades. Nevertheless, significant debate remains about the relationship between CSR performance and corporate financial performance (CFP). This is particularly true for the case of Chinese state-owned enterprises (SOEs). The purpose of the current study is to empirically test the relationship between CSR and CFP. We use data for 66 Chinese SOEs listed on the Shanghai and Shenzhen stock exchanges. The results are interesting in that they are not consistent with similar studies using US and other Western market data. We find a significant negative relationship between CSR performance and CFP. The results are discussed in light of the preferential government treatment afforded to Chinese SOEs, and social welfare requirements imposed on such entities. Implications for Chinese policy-makers are discussed.

Citation

Rutledge, R.W., Karim, K.E., Aleksanyan, M. and Wu, C. (2014), "An Examination of the Relationship between Corporate Social Responsibility and Financial Performance: The Case of Chinese State-Owned Enterprises", Accounting for the Environment: More Talk and Little Progress (Advances in Environmental Accounting & Management, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 1-22. https://doi.org/10.1108/S1479-359820140000005001