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Capital Structure as a Mediating Factor in the Relationship between Uncertainty, CSR, Stakeholder Interest and Financial Performance

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  • Ahmed Imran Hunjra

    (University Institute of Management Sciences, PMAS-Arid Agriculture University, Rawalpindi 46000, Pakistan)

  • Peter Verhoeven

    (School of Economics and Finance, QUT Business School, Brisbane 4000, Australia)

  • Qasim Zureigat

    (Sulaiman AlRajhi School of Business, Sulaiman AlRajhi University, Al Bukayriyah 51941, Al Qassim Province, Saudi Arabia)

Abstract

We examine the mediating role of capital structure in the perceived relationship of uncertainty, corporate social responsibility (CSR), stakeholder interest and financial performance. We collect data through questionnaires, and survey the Chief Financial Officers (CFOs) of the service sector of Pakistan. We apply Structure Equation Modeling (SEM) for data analysis. We find that CFOs perceive uncertainty, CSR and stakeholder interest to have both direct and indirect impacts on financial performance. In particular, we find evidence of the mediating effect of capital structure in the relationship. Our findings imply that firms screen out uncertain situations while making capital structure decision and pursuing CSR-related activities.

Suggested Citation

  • Ahmed Imran Hunjra & Peter Verhoeven & Qasim Zureigat, 2020. "Capital Structure as a Mediating Factor in the Relationship between Uncertainty, CSR, Stakeholder Interest and Financial Performance," JRFM, MDPI, vol. 13(6), pages 1-18, June.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:6:p:117-:d:367850
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    1. Barbara Grabinska & Dorota Kedzior & Marcin Kedzior & Konrad Grabinski, 2021. "The Impact of CSR on the Capital Structure of High-Tech Companies in Poland," Sustainability, MDPI, vol. 13(10), pages 1-20, May.
    2. Daniel Ogachi & Zeman Zoltan, 2020. "Corporate Social Responsibility and Firm Value Protection," IJFS, MDPI, vol. 8(4), pages 1-22, November.
    3. Wissem Benali, 2025. "Effects of CSR, company size, and company age on financial performance: firms listed on the Tunisian stock exchange," SN Business & Economics, Springer, vol. 5(7), pages 1-12, July.
    4. Li, Zhi & Liu, Yue & Huang, Wenxuan, 2024. "Capital structure and corporate litigation," International Review of Economics & Finance, Elsevier, vol. 95(C).

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