The impact of corporate governance on CSR in Chinese Manufacturing Industries

Abstract

Since 1920s the modern corporate social responsibility has been a hot issue, concerned by scholars. When the economic crisis broke in the United States, people began to question and reflect on the powerful economic forces and its violation to human rights, which promote the birth of the theory of corporate social responsibility. It is not difficult to observe that CSR appears to be a western-defined concept, because its origin is deeply rooted in the democratic capitalist countries (Habish et al., 2005; Carroll, 2008; Moon et al., 2010). Indeed, as China has become the world’s second largest economy after the USA(Financial Times, 2010), the possible differences in CSR that may arise from China’s unique market and institutional environment (Li et al., 2009; Kolk et al., 2010; secondly, provide empirical evidence and guidance; Sheng et al., 2011) are yet to be detailed, and there has been little research in this area. And Compared with the rapid development of the economy in China, the development of CSR’s speed id far enough. In China, Sanlu milk powder incident(2008), the frequent occurrence of mine incident, the vaccine incident in Shanxi, Foxconn Nine jump event within six months, once again let the topic of corporate social responsibility into the cusp of public opinion, and then encourage people to think about corporate Social responsibility deeper. Recent in the view of the operational level, China has not yet formed a specific methodology system which fully integrated with China’s actual situation. On the other hand, in the theoretical level, China also still in the digestion stage. From existing researches, we will find that the majority of researches are regulate researches, and the minority are empirical researches. This paper, beginning with corporate governance and combining with stakeholder theory of corporate governance, will discuss whether corporate social responsibility will affect the situation. In the light of previous research results, this paper firstly analyzes theoretically, then proposes the assumption, finally carries out empirical test. To corporate social responsibility, corporate governance is an important tool. Corporate social responsibility can be implemented well only by sound corporate governance. Corporate governance structure is a very important factor in corporate behavior. Corporate governance can be divided into external governance mechanisms and internal governance mechanisms. This paper will discuss how corporate governance reflect corporate social responsibility. According to the research propose mentioned above, this thesis is divided into the following parts: Chapter one is the introduction of this thesis, mainly introduces the writing background, research ideas, papers framework, and the expected contribution; Chapter two is the literature review and theoretical analysis. reviewed and analyzed the domestic and foreign research results in three contents: internal governance mechanism, corporate social responsibility, the relationship between corporate governance and corporate social responsibility. We defined some basic concepts involved in this paper at the first, then, carried on theory analysis to the relationship between corporate governance and corporate social responsibility, and finally cleared the research direction of this article. The third chapter put forward the research hypothesis and research design. It screened and determined the sample, designed the model and defined each variable in this model. Chapter four is about the method of this research and how this research selected sample and collected data. Chapter five express the empirical results and analysis. Chapter six is the research conclusion and the enlightenment, we get research conclusion of this paper on the basis of the analysis of empirical results, also, to the results of the study, this paper gave some suggestions on how to consummate the internal governance, and improve the performance of corporate social responsibility policy. Contribution of this study is expected in the following three aspects: firstly the research method and research of corporate social responsibility make up for the lack of research; thirdly, innovate the indicators. Limitations of this study is mainly reflected in the following three aspects: First, this article only selected China's manufacturing industry as the study sample. but social issues will change in different industries, thus industry is a limitation to the applicability of this paper’s research results. Second, Corporate governance is divided into internal governance and external governance, this article only selected the company's internal governance as research sample. Third, the content of corporate social responsibility involves a very wide range, but this paper just measured CSR into 4 types. ( environment, product, charitable and ethics ). This makes the measurement of social responsibility has been lacking in comprehensiveness and accuracy.