Role of Corporate Social Responsibility in Sustaining Earning Value: Insights from an Emerging Country

The corporate sector in Pakistan, being more focused on profits, has displayed implicit reluctance in taking care of employees and stakeholders. As such, this study evaluated the relationship between corporate social responsibility (CSR) and earning value (EV). In this modern industrial era, the corporate sector has failed to keep up with the needs of stakeholders, thus adversely affecting business and sustainable socio-economic development within society. This study identified CSR offenses, as contemporary studies have found that the policies of the best award-winning organizations contribute positively to CSR activities. The study outcomes are mixed, which revealed that in Pakistan firms with better CSR processes displayed a positive association with earning value. However, the influence on the financial conditions of firms with the lowest CSR participation was insignificant. This study highlights that rigorous but well-designed CSR processes can trigger earning value in the long run, while inefficient processes may harm financial conditions in the short run. Firms with mid-level CSR showed a positive relationship with EV, which enhanced their business structure, performance, and corporate prospects.