Universal Journal of Management Vol. 5(10), pp. 457 - 476
DOI: 10.13189/ujm.2017.051001
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Corporate Social Responsibility and Corporate Financial Performance: Case Study of Pakistan

Mahmoud Y. M. Kaskeen ^*
International Islamic University Islamabad, Pakistan

ABSTRACT

Purpose: The relationship between corporate social responsibility (CSR) and corporate financial performance has been subject to extensive empirical enquiry. Yet the body of evidence that has accumulated about the nature of the relationship is equivocal. Purpose of this research is to explore the impact of Corporate Social Responsibility (CSR) on Firm Performance while controlling the impact of Firm Specific variables for Pakistani Manufacturing Sector. Methodology: We measure CSR by taking three sub variables, whereas CP measurement approaches include accounting-based measures, market-based measures and combined measures. We used panel least square method by using fixed effect model, we took 56 cross sections (Companies listed on KSE) with six years of time series, and thus we gathered or estimated on 336 firm year observational data. Results: we performed Housman and test statistics favored for fixed effect model for equations. Multiple regression results reveals that Donations has strong negative effects on accounting based market returns, while coefficient is not statistically significant from zero for Earning per share, while workers profit participation fund and Workers welfare funds has strong significant impact on financial performance in term of accounting, equity and market base. However Earning before earning and tax and firm growth (our control variables) coefficients has shown strong positive impact on financial performance, while firm cash availability has negative impact on financial performance for sample under study. After control long firm specific variables we found a strong significant impact of CSR on FP for Pakistani manufacturing sector. Practical Implications: The results of said research would help corporate executives and financial managers for execution of owners' wealth goal (Financial Profitability) by implementing proper CSR practices in manufacturing sector companies.

KEYWORDS
Corporate Financial Profitability, CSR, Financial Performance, ROA, ROE, EPS, WWPF, WPF

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Mahmoud Y. M. Kaskeen , "Corporate Social Responsibility and Corporate Financial Performance: Case Study of Pakistan," Universal Journal of Management, Vol. 5, No. 10, pp. 457 - 476, 2017. DOI: 10.13189/ujm.2017.051001.

(b). APA Format:
Mahmoud Y. M. Kaskeen (2017). Corporate Social Responsibility and Corporate Financial Performance: Case Study of Pakistan. Universal Journal of Management, 5(10), 457 - 476. DOI: 10.13189/ujm.2017.051001.