Corporate Social Responsibility and Firm Performance: Evidence from Pakistan

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