A Study On Relationship Between Pharmaceutical Corporate Social Responsibility And Financial Performance

During 21st century, corporate social responsibility has become a common management practice and also has been paid great attention by global businesses and governments. With rapid development of China's economic, many domestic industries have been stimulated and have developed at an unprecedented speed. With global economic integration and growth, more domestic enterprises are encouraged to participate in international market competition. Facing with domestic and international market competition, consumers'demands for high quality products, environmental deterioration and insufficient natural resources, industry competition and enterprise credit crisis, employees'protection for their legal rights and the requirements of corporate social responsibility for social stability and harmony, domestic corporations must seek new strategies to improve their competitive qualities. The movements of corporate social responsibility are flourishing in the global world, which are considered as guides for corporation social responsibility development and can provide a favorable external environment, more importantly, if we can clarify the relationship between corporate social responsibility and financial performance, it will enhance the corporate social responsibility action. This thesis, which is based on corporate social responsibility and stakeholders'theory, will give corporate social responsibility and stakeholder's definition and construct the corporate social responsibility and financial performance research model. After having a deep study of academic literatures, the author has constructed social responsibility and financial performance measures and selected research methods which meet the requirements of models to carry out correlation and regression study. By using 51 pharmaceutical companies listed in Shanghai or Shenzhen Securities Exchange from 2003 to 2009, I have done empirical research on the relationship between pharmaceutical corporate social responsibility and corporate financial performance. The regression results have showed that pharmaceutical company fulfills its social responsibilities having a positive relationship with its financial performance in long run. But in the view of current, the relationship between pharmaceutical company fulfilling its social responsibilities and its financial performance is not clear.