Can the spending of corporate social responsibility be offset? Evidence from pharmaceutical industry

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F62690094%3A18450%2F22%3A50019082" target="_blank" >RIV/62690094:18450/22:50019082 - isvavai.cz</a>

Result on the web

<a href="https://www.tandfonline.com/doi/full/10.1080/1331677X.2022.2048194" target="_blank" >https://www.tandfonline.com/doi/full/10.1080/1331677X.2022.2048194</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1080/1331677X.2022.2048194" target="_blank" >10.1080/1331677X.2022.2048194</a>

Result language

angličtina

Original language name

Can the spending of corporate social responsibility be offset? Evidence from pharmaceutical industry

Original language description

This study aims to investigate whether the costs spent on corporate social responsibility (CSR) can be offset, and identify the inflection point when financial returns from CSR exceed the spending. By using Principal Component Analysis, we developed the Carroll&apos;s CSR model to measure actual CSR spending. Drawing on data of 315 listed pharmaceutical firms from China, the quadratic effect was used to examine the inflection point, and the panel data regression was employed to examine the impact of CSR spending on current and subsequent financial performance. The results show that CSR spending cannot be offset in the short-term. After two years of CSR implementation, ethical-domain and overall CSR spending positively relate to return on assets (ROA), whereas legal-domain CSR spending positively affects ROA after three years of CSR implementation, all justifying that CSR spending can be offset in the long-term. This research contributes to literature by precisely recognizing the time-based inflection point in financial performance arises, which is less discussed in existing CSR studies. The study findings imply that corporate managers need to view CSR spending as capital investment rather than operating costs, and policy makers should mandate institutional arrangements to facilitate CSR.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50201 - Economic Theory

Project

—

Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2022

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Economic research-Ekonomska istrazivanja

ISSN

1331-677X

e-ISSN

1848-9664

Volume of the periodical

35

Issue of the periodical within the volume

1

Country of publishing house

GB - UNITED KINGDOM

Number of pages

25

Pages from-to

6279-6303

UT code for WoS article

000768050900001

EID of the result in the Scopus database

2-s2.0-85126523465