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

Minghui Yang, Paulo Bento and Ahsan Akbar
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Minghui Yang: International Business School, Guangzhou College of South China University of Technology, Guangzhou 510800, China
Paulo Bento: ISCTE Business School, University Institute of Lisbon, 1649-026 Lisbon, Portugal
Ahsan Akbar: International Business School, Guangzhou College of South China University of Technology, Guangzhou 510800, China

Sustainability, 2019, vol. 11, issue 20, 1-18

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.

Keywords: CSR dimensions; chinese pharmaceuticals; mixed-method approach; firm performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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