Corporate Social Responsibility and Firm Performance: Evidence from Pakistan

Abstract

The present paper examined the issues around CSR and firm performance relationship in Pakistan, an emerging and increasingly transparent economy with rising corporate responsibility and stakeholder demands. Based on a panelwise collection of data on the eight biggest Pakistan Stock Exchange (PSX) firms listed in the period 2010-2024, this study employed regression analysis through the ordinary least squares (OLS) technique. The measurement of Sustainability Reporting (SR) is done in accordance with modified Moskowitz disease type in the form of annual reports and sustainability disclosures. The financial performance is measured on Return Assets (ROA), Net Profit Margin (NPM), Return on Equity (ROE) and Market value (MV). The results show that NPM and CSR have strong positive relationship, meaning that, more profitable firms in Pakistan have high chances of participating in CSR activities. There are poor or non-existent correlations with ROA, ROE, and MV. This research provides important details to the few empirical studies on CSR in South Asia and can give valuable information to managers and investors and policymakers.