A Study on the Impacts of Social Performance on Financial Performance of China's Listed Company

The correlation between corporate social performance (CSP) and financial performance (FP) has been a hot topic in the past several decades. However, the extant studies are concluded with serious divergence due to several problems in researches, among which, the measurement of CSP and methodology used in the empirical analysis are most problematic. Based on the stakeholder theory, this paper measures CSP by the performance of corporate fulfilling responsibility towards the stakeholders and describes the mechanism of how stakeholders respond to it and thus the effects on corporate financial performance. In the empirical part, taking the listed mining companies in Shanghai Stock Exchange and Shenzhen Stock Exchange during the period of 2000-2010 as sample, structural equation model is applied to measure such three latent variables as CSP, CFP and corporate size (CS) by 16 measured variables and further makes empirical verification on the impact mechanism and effect. The result shows that CSP can positively influence CFP, and that corporate size has positive relationship with CSP and CFP.