The following is a paper I compiled for your little monkey for your reference.

The relationship between corporate social performance and financial performance, or corporate social responsibility and financial performance, has been a hot issue in the field of foreign enterprise management in recent 30 years. This paper summarizes three different viewpoints and six different theoretical hypotheses on this field abroad, and points out the future development direction of enterprises in combination with the development of western corporate social responsibility practice.

[Keywords:] corporate social performance corporate social responsibility corporate financial performance

With the arrival of snowstorm and earthquake, corporate social responsibility has become the focus of public attention. How should enterprises find a balance between profit and social responsibility, what is the relationship between corporate social responsibility and financial performance, and how should enterprises reconfigure resources?

Bao Wen, the "father of corporate social responsibility", published the book "Corporate Social Responsibility" in 1953, which marked the beginning of modern corporate social responsibility research. In view of the view that mainstream enterprise theory ignores social responsibility and only emphasizes the maximization of shareholders' interests, both corporate social responsibility theory and stakeholder theory believe that social responsibility affects financial performance. Although they have different research perspectives, the topic of discussion is how the moral behavior of enterprises to stakeholders affects the wealth of enterprises.

One, three different views

On the relationship between them, Wodock and Graves 1997[ 1] pointed out that there are three different views in academic circles: the first view is that they are negatively correlated. That is, corporate social responsibility will lead to competitive disadvantage, and Friedman and other neoclassical economists hold this view. The second view is that there is no connection between the two. The third view is that the two are positively related, and the stakeholder theory holds this view. The empirical research of scholars shows that although there are three different viewpoints in any period, most studies support the positive correlation between them.

Second, six different theoretical hypotheses.

There are six different theoretical hypotheses about the influence direction of the relationship between them, one is that corporate social performance affects financial performance, and the other is that corporate financial performance affects social performance.

1. Social performance affects financial performance.

There are two most influential hypotheses: one is the social impact hypothesis, which holds that high social performance will lead to high financial performance. Enterprises can attract more financial market investment by improving corporate reputation, reducing operational risks and obtaining more support from regulatory agencies, and meeting the needs and expectations of different stakeholders will improve financial performance. Shapiro, 1987. The other is the trade-off hypothesis, which holds that high social responsibility performance will lead to low financial performance, and corporate social responsibility performance will lead to financial expenditure, thus reducing profitability, especially when other enterprises do not actively participate in social activities, which will lead to their unfavorable position and situation in the competitive market.

2. Corporate financial performance affects social performance.

There are also two hypotheses to support this view. Available funds hypothesis, also known as idle resources hypothesis, holds that the social performance of enterprises depends on available financial resources, and good financial performance enables enterprises to invest more funds in social responsibility, thus producing high social performance. On the contrary, the management opportunism hypothesis points out that high financial performance will lead to low social performance. Because managers pursue the realization of personal goals and the maximization of personal interests, when the financial performance of enterprises is good, enterprise managers will reduce their investment in social responsibility to increase short-term benefits. When financial performance is poor, managers will take part in some prominent social activities to offset disappointing results or rationalize them. O'bannon 1997.

In addition, some studies point out that they are synergistic. Positive correlation hypothesis, positive synergy, emphasizes the cycle of good moral character. High social performance will lead to the social impact hypothesis of high financial performance, which in turn will lead to a better theory of available capital for social performance. On the other hand, there may be a vicious circle, that is, there is negative correlation and cross correlation. Emphasizing a good management system will enable enterprises to perform well in all aspects, including financial and social responsibility behaviors.

Some scholars also stressed that in today's highly complex and competitive business environment, enterprises should carry out activities in both the business field and corporate social responsibility field in order to gain competitive advantage and maximize profits.

Third, the development of corporate social practice and its enlightenment

With the continuous development of academic research, the sense of social responsibility of enterprises is also constantly improving. In the increasingly fierce competition and the increasing importance of stakeholders to the organization, some enterprises and investors have realized the importance of social responsibility, and corporate social performance has become a competitive strategy. At the same time, western countries carried out the practice of SA8000 corporate social responsibility certification in 1990s, and social awareness fund and social responsibility investment SRI are becoming the mainstream of American society.

A lot of research and social practice have fully proved that fulfilling corporate social responsibility, paying attention to stakeholders and improving corporate social performance will help enterprises gain competitive advantage and improve financial performance. This will surely become the general trend of enterprise management in the future. As Jocelyn Herridge emphasized, future industry leaders must be firm CSR practitioners in the past. Business operators should attach great importance to this, and at the same time, it is urgent to formulate and introduce more preferential tax policies and other related mechanisms.