Abstract This paper examines the relationship between corporate social responsibility (CSR) performance and firm financial performance (FFP) across corporate life cycle (CLC) stages and different stakeholder groups for 210 Chinese pharmaceutical firms for the 2010–2018 period. The study employs a wide range of econometric models such as pooled ordinary least squares (OLS), fixed effects and random effects models using four different estimators to address endogeneity. Our findings indicate a strong association between CSR and FFP, particularly for shareholders. We observe a positive and significant relationship between overall CSR performance (inclusive of all stakeholders’ responsibility) and FFP across all CLC stages when return on equity (ROE) and return on assets (ROA) are applied. Also, we find that state-owned firms exhibit better CSR performance but are less efficient in terms of market and financial performance. The results of this study can inform and guide managers and investors on the effect of CLC stages and different stakeholders on firm performance.
Li et al. (Fri,) studied this question.