Impact of Corporate Social Responsibility on Financial Performance: A Case of KSE Non-Financial Firms
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Date
2015
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Publisher
UMT, Lahore
Abstract
Conventionally, the researchers in Pakistan indicated investment in Corporate Social
Responsibility (CSR), and its impact on Corporate Financial Performance (CFP).
Basically there are three methods: in first method CSR is measured by investment in
CSR activities; second method is content analysis of CSR disclosure in financial
reports. Third method is based on reputation index of firms regarding CSR, given by
independent agencies. In Pakistan, there is not a single authority to give reputation
index, so this method is not applicable in Pakistan. In this study first two methods are
focused to examine the impact of corporate social responsibility on corporate
financial performance of 70 public limited companies listed in Karachi Stock
Exchange. But due to unavailability of data it limited to 50 non-financial firms for the
time period of 2008-2013. Results of this study showed that CSR has positive impact
on CFP. Investment in CSR has positive impact on both profits before tax and
earnings per share. CSR disclosure also has positive impact on return on sales, return
on equity and return on assets.