Corporate Sustainability Practices Impact on Firm Financial Performance: Evidence from the Banking Sector of Pakistan
Abstract
This study examines Corporate Sustainability Practices (CSP) impact on Firm
Financial Performance (FFP) of the Top public listed commercial banks of
Pakistan. This study observes the annual reports of the top 10 Pakistani public
listed commercial banks by focusing on their market capitalization. Content
analysis technique which is used for data collection from their respective annual
reports for five years from 2012 to 2016 (both inclusive). Fixed Effect (FE) and
Random Effect (RE) model is utilized. Results indicates that CSP have positive
and significant impact on FFP. No significant impact of firm size and age was
found on FFP while leverage has significantly negative impact on FFP (ROA).
These findings suggest that in order to boost financial performance of
commercial banks in Pakistan CSP can be considered. These outcomes propose
that Pakistani commercial banks should be involved constantly in their CSP; as
the result shows that financial performance in commercial banks of Pakistan can
be improved with higher sustainable practices. Although there is scarcity of CSP
impact on FFP related studies; still the existing studies on CSP in Pakistan relate
to the study of such motivations of managers toward CSP and its reporting. A
wide-ranging empirical research on the CSP impact on FFP in top public listed
commercial banks of Pakistan is compartmented by this study.
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