Abstract:
Purpose: The purpose of our research is to examine the effect of corporate social
responsibility on organization’s financial performance in cement sector of Pakistan.
Methodology: The data has been collected from the financial statements of 10 cement
companies listed in Karachi Stock Exchange and it covers data from FY 2010 to 2014. SPSS
software is used to run and analyze the regression model.
Findings: By analyzing the relationship between dependent and independent variables the
* empirical outcome shows that the relationship of CSR to various stakeholders (CSR to
customers, financiers, shareholders and government) with finn’s financial performance
indicator (ROA) is significant to an extent as it is dependent on the type of stakeholders
taken. Therefore according to results of regression analysis it is concluded that CSR to
Financiers and Shareholders has a major impact on the firms ROA in cement sector of
Pakistan as the correlation depicts 69.7% and 61.7% relationship respectively, the research
shows high level ofsignificance between these variables. For further research improvements
on this topic, it has been recommended to use other financial ratios as well to measure CSR
to various stakeholders. Furthermore, the scope of CSR activities to stakeholders should be
extended to see the significant results on the financial performance ofCement Companies in
the long term.
Practical Implication: Nowadays firms are also focusing on maximizing the shareholders
wealth and attracting investors through actively participating in CSR activities. It is observed
from literature that studies on the issue of CSR and its impact on financial performance are
mostly conducted in developed countries. So it is important to analyze the effectiveness of
CSR on corporate performance in a developing economy and contribute to the ongoing
research through conducting this study
