Analysis of the Impact of Social Performance on Financial Performance

Increasing competition and increasing stakeholder interest in the impact of business activities on the environment raises the issue of the need for businesses to invest or focus on corporate social responsibility (CSR) activities. There are opposing views in the field of studies on the positive or negative influence of CSR activities on financial performance. This paper aims to establish whether the various components of social performance have a significant influence on the financial performance of the Top 6 pharmaceutical companies listed on the Bucharest Stock Exchange (BVB), over a period of analysis between 2011-2020. For this, a multiple linear regression model was used, and the results obtained showed that CSR activities positively and significantly influence financial performance, provided that the size criteria are met, which provides financial assurance for the successful completion of CSR actions. Based on the results obtained, pharmaceutical companies should continue to support CSR activities and provide the general public with better information on the actions taken so that they can be analyzed and measured in order to conduct more accurate research.