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CSR Disclosure and the Zero-Leverage Phenomenon: Evidence from Pakistan Listed Firms

Author

Listed:
  • Affaf Asghar Butt

    (Department of Business Administration, University of the Punjab, Gujranwala Campus, Gujranwala 52250, Pakistan)

  • Aamer Shahzad

    (Department of Commerce, University of the Punjab, Gujranwala Campus, Gujranwala 52250, Pakistan)

  • Sadia Anis

    (Department of Commerce, University of the Punjab, Gujranwala Campus, Gujranwala 52250, Pakistan)

  • Luís Miguel Marques

    (Department of Management and Economics, Research Center in Business Sciences (NECE UBI), University of Beira Interior, 6200 Covilhã, Portugal)

  • Flávio Morais

    (Department of Management, Polytechnic Institute of Viseu, 3504 Viseu, Portugal
    Research Center in Business Sciences (NECE), University of Beira Interior, 6200 Covilhã, Portugal
    Center for Advanced Studies in Management and Economics of the UBI (CEFAGE-UBI), University of Beira Interior, 6200 Covilhã, Portugal)

Abstract

The effect of corporate social responsibility (CSR) disclosure on zero-leverage policies is examined for listed firms at the Pakistan Stock Exchange (PSX) from 2010 to 2021. Binary logistic regression models show a statistically significant positive relationship between CSR disclosure and zero leverage. Increased CSR disclosure raises the propensity of firms to have zero leverage. Moreover, the negative effect of CSR disclosure on debt ratios further confirms these findings. Results show that highly disclosed CSR firms face less information asymmetry and prefer equity financing over bank debt. Regulators should develop incentive programs to increase their CSR disclosure and strengthen stakeholders’ relationships.

Suggested Citation

  • Affaf Asghar Butt & Aamer Shahzad & Sadia Anis & Luís Miguel Marques & Flávio Morais, 2026. "CSR Disclosure and the Zero-Leverage Phenomenon: Evidence from Pakistan Listed Firms," IJFS, MDPI, vol. 14(2), pages 1-16, February.
    • Handle: RePEc:gam:jijfss:v:14:y:2026:i:2:p:41-:d:1857443
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