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The Corporate Social Responsibility and Firms' Financial Performance: Evidence from Financial Sector of Pakistan

Author

Listed:
  • Tanveer Bagh

    (University of Azad Jammu and Kashmir Mazafarabad, Pakistan,)

  • Muhammad Asif Khan

    (University of Azad Jammu and Kashmir Mazafarabad, Pakistan,
    School of Economics, Huazhong University of Science and Technology, Wuhan, P.R. China,)

  • Tahir Azad

    (Department of Commerce, Government Boys Post Graduate College for Palandri, Azad Kashmir, I.R. Pakistan,)

  • Shamila Saddique

    (Huazhong University of Science and Technology (HUST), Wuhan, P.R. China.)

  • Muhammad Atif Khan

    (Department of Commerce, University of Management Sciences and Information Technology, Kotli I.R. Pakistan.)

Abstract

Competitiveness of financial sector has increased manifold and the issue of corporate social responsibility (CSR) has become an indispensable concern parallel to concentrating on profitability enhancement. Businesses are consider as social units, they have to serve stakeholders, and tend to execute CSR on priority basis and subsequent disclosure as well. Unhealthy CSR policies may cause externalities and eventual relinquished customers. The main purpose of study is to shed light on the impact of CSR on financial performance (FP) of banking sector of Pakistan, using a sample of 30 commercial banks listed with Pakistan stock exchange for the period of 10 years from 2006 to 2015, selected based upon market capitalization. We applied pooled regression models to investigate the impact of CSR on FP. Empirical findings signify the robustness of pooled model that documented a positive and significant impact of CSR on return on assets, return on equity and earnings per share. This premise holds that CSR has positive and significant impact on FP of selected commercial banks of Pakistan. Based upon key findings, this study postulates CSR phenomenon is consider as an essential growth element and FP-boosting tool by banking industry of Pakistan. Eventually, mainstream of the studies on CSR are in context of well-established companies and nations, however, developing nations are least emphasized, thus the findings of this study greatly contribute in body of knowledge as well as offer pivotal implications for policy makers and governance of financial sector

Suggested Citation

  • Tanveer Bagh & Muhammad Asif Khan & Tahir Azad & Shamila Saddique & Muhammad Atif Khan, 2017. "The Corporate Social Responsibility and Firms' Financial Performance: Evidence from Financial Sector of Pakistan," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 301-308.
    • Handle: RePEc:eco:journ1:2017-02-41
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    References listed on IDEAS

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    Cited by:

    1. Huidong Sun & Mustafa Raza Rabbani & Naveed Ahmad & Muhammad Safdar Sial & Guping Cheng & Malik Zia-Ud-Din & Qinghua Fu, 2020. "CSR, Co-Creation and Green Consumer Loyalty: Are Green Banking Initiatives Important? A Moderated Mediation Approach from an Emerging Economy," Sustainability, MDPI, vol. 12(24), pages 1-22, December.
    2. Krisztina Szegedi & Yahya Khan & Csaba Lentner, 2020. "Corporate Social Responsibility and Financial Performance: Evidence from Pakistani Listed Banks," Sustainability, MDPI, vol. 12(10), pages 1-19, May.
    3. Ibrahim Sameer, 2021. "Impact of corporate social responsibility on organization’s financial performance: evidence from Maldives public limited companies," Future Business Journal, Springer, vol. 7(1), pages 1-21, December.
    4. Musah Mohammed Saeed & Mahalakshmi Mudliar & Manisha Kumari, 2023. "Corporate social responsibility and financial performance nexus: Empirical evidence from Ghana," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(6), pages 2799-2815, November.
    5. Rania B'eji & Ouidad Yousfi & Abdelwahed Omri, 2021. "Corporate Social Responsibility and Corporate Governance: A cognitive approach," Papers 2102.09218, arXiv.org.
    6. Rania Béji & Ouidad Yousfi & Abdelwahed Omri, 2020. "Corporate Social Responsibility and Corporate Governance: A cognitive approach," Post-Print hal-03144756, HAL.

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    More about this item

    Keywords

    Corporate Social Responsibility; Financial Performance; Financial Sector; Pooled Regression;
    All these keywords.

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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