The Relationship Between Corporate Social Responsibility Scores, Earnings Per Share, and Stock Price Volatility in the Pharmaceutical Industry
Year: 2025
Type: article
Abstract: This empirical study examines the relationship between pharmaceutical stock price volatility, Corporate Social Responsibility (CSR) scores, and Earnings Per Share (EPS) using data from forty publicly traded companies in the US and Europe from 2015 to 2024. A quantitative approach is used to explore the relationship. This study examines how CSR and profitability affect stock market activity using multiple regression analysis. Firm-level variables including market capitalisation, R&D spending, and board makeup are also considered. Since CSR scores and stock price volatility are slightly inversely related, organisations with high CSR scores can have reduced risk profiles. Even if the correlation is not statistically significant, EPS are positively correlated with volatility, suggesting that stock performance stability cannot be reached exclusively by profitability. Volatility, R&D spending, and board size were negatively correlated. These interactions were especially important in innovation and governance systems. Multicollinearity between variables like total assets and tradable share fractions necessitates better models for future research. The results support the hypothesis that pharmaceutical companies' CSR activities decrease financial risk less than previously thought.
Author: Zihui Gu
Institution: Shanghai International Studies University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4412184187