ANALYSIS OF THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON THE SOLVENCY OF UKRAINIAN ENTERPRISES UNDER WARTIME CONDITIONS

Abstract

The study of the impact of Corporate Social Responsibility (CSR) on the solvency of enterprises is of particular relevance in the context of increasing competition and demands for business transparency. Solvency is a key indicator of a company's financial health and its ability to meet its obligations. Ukrainian enterprises, operating under wartime conditions, deserve special attention, as disruptions in supply chains, infrastructure destruction, and reduced domestic demand create additional pressure on their solvency. The purpose of this article is to investigate the impact of CSR on the solvency of enterprises in the face of contemporary economic challenges, particularly in wartime conditions. The study is based on quarterly data from 2022 to the first quarter of 2024 and includes an assessment of the solvency of metallurgical enterprises in Ukraine, corporate social responsibility, and the impact of CSR on enterprise solvency. The Granger causality test, the method of directed graphs, and regression analysis were employed. The results of the study indicate that the implementation of social programs has the most significant positive impact on the solvency of enterprises, as expressed through the indicators of return on assets (ROA) and current liquidity. Social programs increase customer trust and improve the company's reputation, leading to higher revenues and profits. Expenditures on improving working conditions also have a positive impact by enhancing employee morale and productivity, although this impact is less significant. Ethical and responsible business practices have a minimal positive impact in the short term, but their influence grows over time. Conversely, environmental initiatives have a negative impact on solvency due to high initial costs and lower immediate financial benefits. The novelty of this study lies in examining the impact of CSR on the solvency of enterprises under wartime conditions, which is a unique context for analysis. The study offers a new approach to assessing the solvency of enterprises, taking into account CSR expenditures in crisis conditions. The proposed models allow for a more accurate determination of the relationship between social initiative expenditures and financial performance, which is crucial for strategic management in unstable conditions.