| Summary: | 碩士 === 中原大學 === 企業管理研究所 === 89 === This study examines the impact of corporate social responsibility on corporate financial performance and portfolio performance, by using the seventy-four listing firms in Taiwan as an example. The empirical results consist of two parts as follows.
The first part is to investigate the relationship between corporate social responsibility and corporate financial performance. This work compares each financial ratio of the two groups that have different degrees to participate in social responsibility activities, and concludes that
1. Participating in social responsibility activities does not decrease company’s profitability. The result supports that companies that practice SR activities will have better profitability than non-SR companies.
2. Participating in social responsibility activities does not decrease company’s market value, which indicates that investors do not think that corporate social responsibility conflicts with the profit maximization of the business.
3. To be socially responsible will not affect the ability of management. In other words, companies that allocate their resources to do socially responsible activities do not become less efficient.
4. Corporate social responsibility does not influence the company’s short-term stability, but will result in better long-term stability.
5. Corporate social responsibility does not affect company’s growth.
The second part is to form a portfolio of SR firms, then compare the portfolio of SR firms with those of non-SR firms and all-sample firms. The results are as follows:
1. When the Treynor, Sharpe, Jensen, and Smith-Tito indices are used to measure portfolio’s performance, the result indicates that the performance of social responsibility investing is above other two portfolios.
2. When M.C.V. index is used to measure portfolio’s performance, the performance of social responsibility investing is better than non-social-responsibility investing, yet is worse than all-sample portfolio.
3. When the Treynor, Sharpe, Jensen, and Smith-Tito indices are used to measure portfolio’s performance, the performance of social responsibility investing outperforms market portfolio.
This study concludes that there is no conflict between corporate social responsibility and corporate financial performance. Hence, this work suggests that Taiwan investors should invest in socially responsible firms.
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