Articlegold2019

Does CSR Influence Firm Performance Indicators? Evidence from Chinese Pharmaceutical Enterprises

Minghui Yang · Paulo Eduardo Gomes Bento · Ahsan Akbar

155 citations0/0 files storedSustainability

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Corporate Social Responsibility Reporting Corporate Identity and Reputation Corporate Governance and Financial Management

Abstract

This research is carried out in the backdrop of increasing product quality and environmental degradation scandals associated with Chinese Pharmaceuticals in recent years. We examined the data of 125 Chinese Pharmaceuticals between 2010–2016 to investigate the impact of overall corporate social responsibility (CSR) performance as well as the performance on five unique aspects of CSR such as shareholders, employees, customers and suppliers, environmental practices, and the society to gauge the impact of these individual dimensions on the firm’s financial performance. The Hexun rating system is used to gauge a firm’s CSR performance on various stakeholder dimensions as it is one of the widely accepted CSR measurement criteria in China. The firm performance is measured by Tobin’s Q, return on assets (ROA), return on equity (ROE), and earnings per share (EPS) ratios. The outcome of the panel-based regression models reveals that the overall CSR score has a positive and significant influence on a firm’s financial indicators. Moreover, although all the CSR dimensions relate positively to firm performance, the environmental aspect of CSR has the most profound impact on firm performance followed by customers and suppliers, and employees. However, the shareholders and social dimensions have a relatively lesser influence on firm performance. These results imply that Chinese Pharmaceuticals shall further optimize each aspect of CSR performance as it can not only create a favorable brand image for various stakeholders but also results in sustainable financial performance.

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References

2010Strategic management a stakeholder approach 1995The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications 1991The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders 2003Corporate Social and Financial Performance: A Meta-Analysis 2001Corporate Social Responsibility: A Theory of the Firm Perspective 2007Strategy and society: the link between competitive advantage and corporate social responsibility 1995The Stakeholder Theory of the Corporation: Concepts, Evidence, and Implications 2003Misery Loves Companies: Rethinking Social Initiatives by Business

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