Corporate Social Responsibility and Firm’s Performance: An Evidence from the Cement Industry of Pakistan.

Abstract

This study aims to investigate the influence of Corporate Social Responsibility (CSR) on the financial performance of the firms in cement industry of Pakistan. The study employed quarterly data collected from the annual and other financial reports of the sample firms from 2009 to 2016. Corporate Social Responsibility (CSR), as a predictor, is measured by Donation, Insurance and Worker Welfare Fund while firm’s performance, as an outcome variable, is measured by Earning per Share (EPS) and Net Profit Margin (NPM). The results, by employing Ordinary Least Square with Panel Corrected Standard Errors (OLS-PCSEs) showed that CSR has a positive effect on the firm’s financial performance. Besides supporting the stakeholder’s theory, the findings also explain the social behavior of Pakistani cement firms which implies that firms implementing CSR activities in their operations are having an edge on those who do not implement any such activities.