© 2020 JETIR January 2020, Volume 7, Issue 1 www.jetir.org (ISSN-2349-5162) JETIR2001030 Journal of Emerging Technologies and Innovative Research (JETIR) www.jetir.org 213 CORPORATE SOCIAL RESPONSIBILITY AND FIRM FINANCIAL PERFORMANCE: BANGLADESHI LISTED PHARMACEUTICALS COMPANIES Mashiur Rahman Assistant Professor, AUST, Sarah Chowdhury Assistant Professor, AUST. Abstract: The paper aims to investigate empirically the impact of corporate social responsibility (CSR) on financial performance in Bangladeshi listed pharmaceuticals companies. The paper uses GMM regression estimation to assess the effect of CSR on firm financial performance. This study measures sustainability disclosure by developing sustainability disclosure index based on prior studies along with global reporting initiatives guidelines and the combination of accounting and economic means of measuring firm financial performance. CSR is found to have a strong positive impact on firm financial performance in Bangladeshi Pharmaceuticals companies. The results also show moderation of earnings management on impact of CSR on financial performance. This study does not only serve as a reference work for subsequent investigations into the impact of CSR on firm performance in Bangladeshi pharmaceuticals companies but also serves as a guide to policy makers on the financial impact of CSR adoption. This study provides important managerial implications. This study advances our understanding of the CSR-financial performance relationship by exploring opportunistic motives of the bank managers in this nexus in the developing economy context. Keywords: Corporate Social Responsibility, Firm Financial Performance, Pharmaceuticals, GMM. 1. INTRODUCTION Corporate social responsibility and firm financial performance have a connection, which is significantly observed by (Bauman and Skitka, 2012), (Siegel and Vitaliano, 2007) and (Aguinis and Glavas, 2012) in their studies respectively on organizational behavior, strategic management and sustainability. According to Waddock and Graves (1997), Peters and Mullen (2009), it has been exposed that companies practice CSR to enhance their corporate and financial image, where Grant et al. (2008) argue that it is not necessary for all companies to perform CSR. Though Hossain et al. (2015) found the significant relationship between CSR and financial performance in the country like Bangladesh. There is still an inconclusive direction on the association between CSR and FFP from the viewpoint of Bangladesh. But some relevant sorts of statements have generated from those by Resmi et al. (2018) and Hossain et al. (2015), where concentrated on the banking and agri-business firms respectively. Belal et al., (2015), stated that performing CSR adequately is difficult in a corrupted country like Bangladesh. However, Bangladesh is doing well in the pharmaceuticals sector. It is one of the enrich sectors of Bangladesh after the RMG sector. Though there is a lack of studies where it is unclear of the embracement of CSR plan according to the legislative. Most of the pharmaceuticals companies want to hide their corruption by invest more on practicing CSR. As a result, an outcome of CSR and FFP can be investigated. Moreover, Sobhani et al. (2012); Muttakin et al. (2015), organized the functions of CSR in different categories, like economic-oriented CSR, environment-oriented CSR and society-oriented CSR. By this study, it is discovered that the nature of involvement between the CSR and FFP varies according to the CSR dimensions. CSR and FFP connection across three major CSR groups has a salient implication on FP, which is based on the earlier study, where a sample of 98 firm-year observations (2013-2019) is utilized. Some key attributes make the study more significant. Such as the implications of CSR on firm activities, the research also helps to detect the potential drives on the performance by the pharmaceutical managers. The study assists to explore the reasonable force of FFP in the association between CSRR and FP. The gap is filled in the literature through this study. Though there are some observations. CSR literature can be expanded by distinguishing CSR into four certain groups largely. The influence of CSR category on firm financial performance also remains blurred. The impact of the variation of CSR categories on financial activities may help managers to focus on those categories in order to produce utmost gains. In this regard, Feng et al. (2018) suggested that some degree of corporate possessions should be distributed to gratify company’s stakeholders proficiently and tactically to serve their growing demands for CSR. This research adds value to the li terature on CSR and financial performance through comparing the intensity of CSR reporting on the basis of GRI procedure. This study as well contributes to the literature on CSR and FP by establishing whether the monetary dealings correlate with GRI reporting level for pharmaceuticals sector or not. On the whole, managers can gain the vital performance implications on allocating resources through this study. In addition, the study focuses on the moderating role of the structure of the firm based on the content, which is not discovered by the earlier studies. The measures of financial performance (return on asset [ROA] and Tobin’s Q) both are utilized properly through this r esearch. Lastly this helps to make our findings stronger. Few researchers Elouidani and Zoubir, (2015); Gatsi et al., (2016), confined the historical performance of the firm by only means of accounting measure. Ding et al et al. 2016 added only the market observation and future expectations of the firm