Author(s)

Xiyue Zhang

Corresponding Author

Xiyue Zhang

Abstract

Based on the data of A-share listed companies from 2015 to 2023, this paper empirically tests the influence of ESG performance of pharmaceutical enterprises on financial stability through multi-industry comparative analysis. It is found that the comprehensive index of financial soundness will be significantly improved for every 1 point increase in ESG performance of pharmaceutical enterprises (p<0.01). Among them, the promotion effect of governance (G) dimension is the most obvious, far exceeding the dimensions of environment (E) and society (S). Further grouping regression shows that this effect is more intense within the pharmaceutical industry, and its ESG coefficient is significantly higher than that of non-pharmaceutical enterprises. This study constructs a financial soundness index system including Z-score, cash flow stability and asset-liability ratio volatility. Combined with the control variables such as enterprise scale and R&D intensity, the explanatory power of the model is above R²=0.38. The research shows that ESG is not only a compliance requirement, but also an internal mechanism to improve the financial resilience of enterprises, especially in the pharmaceutical industry with strict supervision and great ethical responsibility.

Keywords

ESG Performance; Financial Soundness; Pharmaceutical Enterprises; Governance Quality