Research On The Effect Of ESG On Financial Performance Of Pharmaceutical Manufacturing Enterprises

Environment-social-governance(ESG)is a concept highly consistent with the layout of national development,which can effectively deal with environmental pollution,international economic recession and other challenges.It is highly valued by the government,society,investors and other sectors.Since entering the new era,Chinese economic strength has achieved a historic leap,the new development concept,the overall layout of the "five-sphere integration" and the "dual carbon" strategy have been vigorously promoted and implemented,and the evaluation of enterprises’ ESG performance has become a hot topic from all walks of life.However,due to the strong externality and high capital investment required by enterprises to fulfill ESG responsibilities,it may bring certain risks,which may make some enterprises hesitate.In order to guide the whole society to participate in sustainable and high-quality development,The State Council and local governments have issued a series of policies and increased government subsidies in relevant aspects to created a good atmosphere.Pharmaceutical manufacturing enterprises are important industries with serious pollution and closely related to people’s living standards.It is of profound significance for building a healthy China to assume their ESG responsibilities.Therefore,the impact of ESG on the financial performance of pharmaceutical manufacturing enterprises and the moderating effect of government subsidies in the relationship between the two have certain research value.Taking the data of 102 pharmaceutical manufacturing enterprises in China from 2012 to2021 as samples,we study the impact of ESG on financial performance by using literature research,quantitative research and empirical research methods.Firstly,the literature on the relationship between ESG and financial performance,the relationship between government subsidies and financial performance,and the relationship between government subsidies and ESG at home and abroad was reviewed,and relevant theories were expounds to understand the general direction and theoretical basis of the research.Secondly,it puts forward hypotheses on the impact of ESG on the financial performance of pharmaceutical manufacturing enterprises in China and the moderating effect of government subsidies.Meanwhile,it constructs the financial performance evaluation index system and uses the entropy method to calculate the comprehensive score to measure the explained variable.ESG score of China Securities and the ratio of government subsidy to operating income are selected to measure the level of ESG and government subsidy of pharmaceutical manufacturing enterprises,and they are used as explanatory variables and moderating variables respectively.Thirdly,combined with the constructed evaluation index system and empirical model,descriptive statistics,correlation analysis and multiple regression analysis methods are used to verify the proposed hypothesis and to distinguish dimensions and business scope for testing.The results show that the implementation of ESG can significantly improve the financial performance of pharmaceutical manufacturing enterprises,and there is a lag effect.Among them,the social and governance dimensions have a greater impact on the financial performance.The group test shows that ESG has a stronger effect on financial performance for non-traditional Chinese Medicine Enterprises.Government subsidies can positively moderate the positive impact of ESG on the financial performance of pharmaceutical manufacturing enterprises.Finally,in order to promote the sustainable and high-quality development of pharmaceutical manufacturing enterprises,countermeasures and suggestions are put forward for the problems found in the research process.From the perspective of ESG,enterprises should actively implement ESG concept,improve ESG performance and strengthen ESG information disclosure.From the perspective of government subsidies,pharmaceutical manufacturing enterprises should standardize their use,accounting treatment and disclosure.Make the impact of ESG on financial performance under the adjustment of government subsidies more significant,and realize the original intention of government subsidies and the healthy development of pharmaceutical manufacturing enterprises.