Study On Corporate Social Responsibility Of Pharmaceutical Industry

Corporate Social Responsibility means that companies shouldconsider their responsibilities to its employees, customers, communityand the environment while pursuing profits. Nowadays companies inChina pay little attention to fulfilling their responsibility to the society.And there are various problems on food, drugs etc. been found out acrossthe country, such as “The melamine incident”, lean meat powder etc. OnApril15,2012, CCTV “weekly quality report” column broadcast “thesecrets in capsules” which disclosures that factories in Jiangxi, Hebei andZhejiang province used hazardous industrial gelatin to produce drugcapsules illegally. Thirteen kinds of drug capsules have been found madewith industrial gelatin, including Xiuzheng pharmaceutical corporationwhich was involved in producing capsules with scraps of leftover leather.The poisonous drug capsules incident happened because pharmaceuticalcompanies pursued profits at the cost of customers’interests, putting asidetheir responsibilities to customers. This paper will analyze the response ofinvestors on the poisonous drug capsules incident by the method of event study which represents low records of pharmaceutical corporations ontaking social responsibility. On the other hand, this paper will analyze theimpact to shareholders’ wealth if pharmaceutical companies take theirsocial responsibility by building models. This paper will help enrich theempirical research of social responsibility in China, and provide advicefor companies on taking their social responsibility.