CORPORATE SOCIAL RESPONSIBILITY AND FIRM PROFITABILITY: A CASE OF OIL AND GAS SECTOR OF PAKISTAN

Abstract

The purpose of this study was to find the impact of Corporate Social Responsibility
(CSR) practices on the financial performance of the Pakistani firms. The sample data
includes 10 companies of Oil & Gas sector, listed on the Karachi stock exchange for the
period 2006-13. The data was collected from annual reports of these companies.
Variables include, CSR spending of the company, net profits, net profit margin and total
assets. The correlation and regression tests were conducted in MS-Excel. The results
suggest a positive correlation between CSR and net profit and net profit margin on the
other hand negative correlation was found between CSR and total assets, but an
insignificant impact of CSR activities on profitability of the firm. CSR is actually
responsibility of business to play their part by sharing their profits with society as
without them they could not survive.