Abstract:
Purpose: The research is carried out to determine the impact of CSR activity on the financial
performance of the firms dealing in textile manufacturing sector. The research was carried
out on textile manufacturing firm resisted and listed in PSX 100 Index (Only nine firms were
taken).
Methodology & Design: The research follows a quantitative research methodology
however; the data for 5 years have been carried out to determine the impact. The data for this
study has been collected from secondary sources i.e. financial statements of the firms. The
data analysis has been conducted through E-views software.
Findings: The findings from the research show that, there has been a significant impact of
CSR activities on the financial performance of the firms in textile sector. The findings from
E-views test identifies that, 23% of the variation in ROA is explained by the research model.
The findings also suggest that, CSRI has significant impact on the firm’s ROA while others
(CSR-E, CSR-G & CSR-S) report no significant impact on ROA.
Limitations: The limitations for this research includes, time constraints, budgetary
constraints and Limited sample size.
Recommendations: The Government of Pakistan should allow some tax subsidies on CSR
activities, the chamber of commerce and SECP should provide a resolution for the tax
benefits. The Audit committee should also perform separate audits of the CSR budgets and
its spending.
