An Empirical View of Corporate Social Responsibility and its Impact on Profitability of Firms, Evidence from Pakistan

Abstract

This study is conducted to find the impact of corporate social responsibility on the financial performance of Pakistani firms. For this study, seven main sectors of Pakistan were taken into account including Cement, Chemical, Oil & Gas, Fertilizers, Tobacco Sector, Pharmaceutical Sector and Textile Sector. Listed companies of these sectors on PSX for the period of 2008 to 2019 were used as sample. Data was gathered from publicized annual reports of these companies as well as the direct source from the internet. Dependent variable was Return on Assets as while CSR is used as Independent variable .Researcher also have Control variables includes Size of Firm, Net Profit Margin, Return on Equity, Dividend Payout Ratio, Liquidity Ratio, Leverage Ratio, Market Share and GDP Growth. Regression tests were analyzed on Stata and result suggest that CSR activity has significant negative impact on the return of assets of Pakistani firms