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Sustainability 2014, 6(7), 4077-4101; doi:10.3390/su6074077

Relationship between Corporate Social Responsibility and Financial Performance in the Mineral Industry: Evidence from Chinese Mineral Firms

1,2,* , 1,2,* , 1,3
and
1,2
1
School of Humanities & Economic Management, China University of Geosciences, Beijing 100083, China
2
Key Laboratory of Carrying Capacity Assessment for Resource and Environment, Ministry of Land and Resource, Beijing 100083, China
3
School of Economics and Management, Southwest University of Science and Technology, Mianyang 621010, China
*
Authors to whom correspondence should be addressed.
Received: 20 March 2014 / Revised: 26 May 2014 / Accepted: 13 June 2014 / Published: 30 June 2014
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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Abstract

This paper examines the relationship between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP) using panel data for 228 Chinese mineral listed firms from 2010 to 2013 with Pooled Least Squares regression analysis. Our study considers five different sublevel CSR issues—shareholder responsibility, employee responsibility, environmental responsibility, public responsibility, and supplier, customer and consumer responsibility—in capturing the effects of CSR elements on CFP. The estimation results show the different effects of each sublevel CSR issue on CFP. Overall, shareholder, employee responsibility, environmental responsibility, supplier, customer and consumer responsibility have significant relationships with CFP, which are the stakeholders who have the closest linkage with firm operations. Meanwhile, public responsibility outside the firm does not show significant interaction with CFP, which is why many mineral firms ignore the public interest and this leads to conflicts. Shareholder responsibility has the most significant positive effect on CFP. Supplier, customer and consumer responsibility and environmental responsibility usually have negative effects on CFP as costs increase. Moreover, all 228 listed mineral firms that were selected in this paper have been classified into five sub-sectors: the extractive industry, metal fabrication industry, oil and gas industry, gas and water-related industry, and oil-producing equipment industry, based on the Industry Classification Benchmark (ICB). Our study shows that the differences in the relationship between CSR and CFP for five sublevel industries are due to industry characteristics. If the government wants to solve these conflicts and positively encourage firms to adopt CSR, it is necessary to create a mining development environment whereby firm profits are closely tied to CSR. View Full-Text
Keywords: corporate social responsibility; corporate financial performance; Chinese mineral firms; relationship corporate social responsibility; corporate financial performance; Chinese mineral firms; relationship
This is an open access article distributed under the Creative Commons Attribution License (CC BY 3.0).

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MDPI and ACS Style

Pan, X.; Sha, J.; Zhang, H.; Ke, W. Relationship between Corporate Social Responsibility and Financial Performance in the Mineral Industry: Evidence from Chinese Mineral Firms. Sustainability 2014, 6, 4077-4101.

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