Corporate Social  Responsibility as a  source of Financial  Performance:  Evidence from  Pakistan

Muhammad Muarif  Maqbool; Rana Tanveer  Hussain; Muhammad  Aslam

doi:10.54692/ajss.2020.04041133

Muhammad Muarif Maqbool School of Commerce and Accountancy, Minhaj University, Lahore, Punjab, Pakistan.
Rana Tanveer Hussain School of Commerce and Accountancy, Minhaj University, Lahore, Punjab, Pakistan.
Muhammad Aslam School of Commerce and Accountancy, Minhaj University, Lahore, Punjab, Pakistan.

DOI: https://doi.org/10.54692/ajss.2020.04041133

Keywords: Corporate Social Responsibility Disclosure Index (CSRDI), Financial Performance (FP), Content Analysis, ROA, ROE, Tobin’s Q

Abstract

Corporate Social Responsibility Disclosure (CSRD) Guidelines (2012) constituted by the Security and Exchange Commission of Pakistan (SECP) for all listed companies in Pakistan. The purpose of this study is to explore post guidelines effects over firms’ CSRD level as well as CSRD association with financial performance of Pakistan’s automobile sector from 2013-2019. CSRD has been measured by developing CSRD index of 45 items from six CSR dimensions (employee, customer, community, environment, energy and investor). Financial performance has been measured by return on assets (ROA), return on equity (ROE) and Tobin’s Q (TBQ). Study considered firm age, firm size and financial leverage as control variables. Descriptive statistics has applied for measuring CSRD level. The association between CSRD and financial performance has measured by multiple regression models. Findings of the study show an increasing trend in the CSRD level during the study time period except 2019. Study also provides an evidence of significant positive association of CSRD with financial performance with all financial performance measures.