Corporate Social Responsibility and Firm Performance: Evidence from Pakistan

NAEEM KHAN, QAISAR ALI MALIK, AHSEN SAGHIR
2020 International Review of Management and Business Research  
The current study aims at exploring the relationship of CSR practices with firm performance (FP) in the non-financial sector of the Pakistan stock exchange (PSX). For this purpose, the study uses sample data of 231 companies listed at PSX. The study uses "donation amount to sales" as a proxy variable for CSR practices and return on equity (ROE), return on assets (ROA) as the proxies of firm performance. The models are tested using a panel regression estimation technique with a fixed effect
more » ... a fixed effect method, as suggested by Hausman test. The results show that CSR is significantly positively related to ROE. Findings indicate that investment in CSR brings positive change in a firm"s profitability which ultimately leads to an increase in the shareholder"s wealth. Keywords: Corporate Social Responsibility, Pakistan Stock Exchange, Firm Performance, Fixed Effect Model, Non-financial Sector.
doi:10.30543/9-4(2020)-32 fatcat:phojdmailjek7kowpjkouhvy2q