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Financial Effects of Corporate Social Responsibility and Information Transparency: Research in the Pharmaceutical Industry
The article is devoted to research and evaluation of the usefulness of information disclosed in reports of pharmaceutical companies. The main purpose of the study was to assess the transparency of the metric, inter-firm comparability of nonfinancial reporting data, and to identify the usefulness of the disclosed information for international pharmaceutical companies. The methodological basis of the research is the harmonization of the requirements of business practice standards with financial reporting standards. The paper uses the method of proportional-typical selection of stable structured performance indicators of companies. The authors were not limited to information requests from investors in one country, individual companies, or priority areas of interests of interested and involved persons. The study approach implemented for the multilateral consideration of the views of stakeholders. The research database was compiled by reports of five companies, such as Johnson & Johnson, Novartis AG, Merck KGaA, Sanofi, and Takeda Pharmaceutical Co. Ltd. from the Global Reporting Initiative Database and financial reports of 20 pharmaceutical companies of the Access to Medicine Index System in 2014 and 2016. The result of the study is that the total position of 5 companies moved up from the 8th to the 6th rank. The result of the ratio of growth rates of their total revenue, capitalization and long-term capital is positive when compared with the growth rate of the quality of their disclosure of non-financial indicators. Such relationship is the strongest in attracting long-term capital, followed by growth in capitalization and it is the smallest in growth in revenue. The format of the minimum required set of harmonized indicators helps to increase the confidence of stakeholders in the financial and non-financial information of socially responsible companies. The novelty of the results obtained consists in using a metric expression of the quality of reporting indicators to assess their usefulness in the business practice of companies with a production profile. The results obtained in the course of the study allow us to make a generalized conclusion that useful information generated on the basis of harmonization of structured data from financial and non-financial statements contributes to increasing the level of business activity and its comprehensive performance of all parties involved in the company’s affairs.