Corporate Social Responsibility and Firm Financial Performance with Moderating Role of Industry Competition: Empirical Evidence from Pakistan

Abstract

This study carried out to examine the relationship between corporate social responsibility and firm financial performance in Pakistani industrial context, which include the industrial and market competition. Our results show that a) CSR affects positively financial performance, b) Relationship of corporate social responsibility and financial performance strengthen by industry competition for non-financial firms. Sample Population consists of 100 non-financial firms and data collection has done through convenience sampling technique. Main purpose of this study to identify the effect of industrial competition on the relationship of corporate social responsibility and financial performance of the non-financial firms of Pakistan. One independent variable, one dependent variable, one moderating variable and three control variables will use to identify the impact of corporate social responsibility on firm financial performance. Independent variable is corporate social responsibility which measure through the corporate social performance and firm financial performance based on ROA. The data will be collected through 100 non-financial firms of Pakistan for the period of 2011-2019. This study evaluates descriptive statistical analysis, correlation, and regression analysis to evaluate the effect of corporate social responsibility activities on the firm performance of non-financial firms with the moderating role of industry competition. It was found that corporate social responsibility has significant impact on ROA while industry competition has also significant impact on the relationship of CSR and ROA. This research will provide Pakistani firms a way to identify their firm performance while having competition in industry