Social Responsibility and Financial Performance of Electric Power Enterprises

Li Leying,Xu Xinpeng

doi:10.22158/jar.v4n3p60

Abstract

This paper empirically tests the relationship between corporate social responsibility and financial performance in the power industry based on the listed companies in 2012-2018. It is found that there is a significant positive correlation between the financial performance and social responsibility of power industry enterprises, indicating that the better the financial performance is, the better the power industry enterprises will perform their social responsibility; the current social responsibility of power industry has a significant negative correlation with the current financial performance, indicating that social responsibility becomes the cost of power industry enterprises, and the degree of social responsibility performance The higher the level, the worse the financial performance of the power industry enterprises; there is a positive correlation between the early stage social responsibility of the power industry and the current performance, but it fails to pass the significance test, which shows that the positive impact of the corporate social responsibility of the power industry needs to appear after a certain period of time, but the positive relationship is unstable.

Highlights

Corporate social responsibility refers to that the way of business operation of an enterprise meets or exceeds the basic standards required by morality, law and the public
Academic circles pay attention to the issue of corporate social responsibility, the most fundamental is the relationship between social responsibility and corporate performance, which is because on the one hand, financial performance is the fundamental guarantee for the enterprise to achieve a series of other goals, the enterprise to fulfill social responsibility needs to have enough financial performance guarantee, on the other hand, the behavior of the enterprise to fulfill social responsibility will affect financial performance
This paper chooses 2012-2018 listed companies in the power industry as a sample to empirically test the relationship between corporate social responsibility and financial performance in the power industry

Summary

Introduction

Corporate social responsibility refers to that the way of business operation of an enterprise meets or exceeds the basic standards required by morality, law and the public. Because under the current situation of attaching importance to environmental protection and developing energy conservation and emission reduction, the common coal power business model will require the electric power enterprises to invest a large cost to rectify. Since the input and output of corporate social responsibility is a long-term process, not a result of “today’s input and today’s output”, Zhang et al (2013) believed that there is an inter temporal impact between corporate social responsibility and financial performance, and that the social responsibility input of the current period will have a positive impact in the period This kind of cross period influence should be more obvious in electric power enterprises. Hypothesis 4: There is a significant positive correlation between the current social responsibility and the financial performance

Empirical Model

Variable Selection

Data Description

Empirical Results