the influence of corporate social RESPONSIBILITY ON COMPANIES’ FINANCIAL PERFORMANCE: STATISTICAL EVIDENCE FROM PAKISTAN

Abstract

Purpose The research purposes to study the impact ofCorporate Social Responsibility ofthe Corporate Financial Performance in context of Pakistan. Methodology & Design The research has been conducted by utilization of data based on secondary sources and the quantitative data is used to conduct the research. A sample of20 Pakistani companies has been selected to conduct the research based on convenience sampling. Moreover, the deductive research approach has been utilized as the hypothesis for the research has been formed to conduct the statistical testing. Findings The value ofR-squared in the OLS regression model is 0.815, which suggests a higher fitness ofregression model. It has been concluded that the sig. or p-value for the model as a whole is 0.00, which suggests that the independent variables as a cumulative have statistically significant impact on the dependent variable i.e. ROA. Moreover, it can be drawn from the variable level analysis that the tax, salaries, EPS, cost rate and debt to equity ratio have a sig. value oflower than 0.05 suggesting that these variables affect corporate financial performance significantly at 95% confidence interval. Limitations this research include small sample size, utilization of selected Numerous limitations faced in financial data from financial statements, application of limited statistical tests, utilization of is faced with availability of limited resources convenience sampling and the fact that research in terms of physical resources and time. Recommendations To end research, recommendations have been provided to Pakistani businesses. Firstly, the businesses are recommended to consider stakeholders’ theory while trying to maximize the CSR. Secondly, it is recommended to the businesses that they must try to maximize the amount invested in CSR as it will eventually be reflected in the bottom-line ofthe company. Thirdly, it has also been recommended to the Pakistani businesses that a keen focus towards these stakeholders is critically important in boosting the CFP.