The effect of CSR disclosure on company profitability: Empirical evidence from China

The machinery manufacturing industry has made outstanding contributions to China's economic development. While manufacturing companies are pursuing maximum profitability, they have caused many social problems, especially environmental pollution. However, these social problems directly affect the profitability of enterprises. As a result, more and more manufacturing enterprises are conscious of the importance of undertaking CSR and disclosing CSR. However, there is still no consensus on what impact CSR will have on the profitability of the company. This dissertation first uses the stakeholder theory and signal theory to determine the framework of the theoretical part of this paper. After that, based on the literature review, this paper quantifies CSR disclosure and profitability. Then, for the sake of determining the relationship between CSR disclosure and profitability, the paper has the data regression analysis based on financial data and CSR disclosure scores of 80 listed companies from 2013 to 2017. Finally, this paper discusses how CSR disclosure affects profitability based on the analysis results, which providing a basis for promoting the implementation of CSR in manufacturing and other industries. In short, this paper argues that CSR disclosure has a positive impact on profitability. This paper puts forward some suggestions on CSR disclosure from different perspectives