Corporate Social Responsibility’s Hidden Power in context of Pakistan: Amplifying Firm Performance

Abstract

This research explores the impact of Corporate Social Responsibility on the performance of firms listed on the Pakistan Stock Exchange in the cement and sugar industries. This link is examined using panel data derived from financial reports from 2013 to 2022. The study includes generally used performance indicators, such as Return on Assets, Return on Equity, and Earnings per Share, by previous literature. The corporate social responsibility data is generated from information released by firms about philanthropic activities, contributions, and R&D projects. The study also takes into account other financial and control variables such as firm size, firm age, and leverage. The random sampling approach is used to create a sample of 28 non-financial listed organizations. Several statistical tests are used in the study, including panel data technology, correlation, random effect, and fixed effect models. According to the findings of this study, corporate social responsibility has a favorable impact on company performance. These findings are consistent with previous research done in developing nations and are relevant for Pakistani businesses, which operate in different economic environments than their Western counterparts. This study provides significant insights for organizations and regulatory agencies. Furthermore, the paper makes suggestions for future research, such as the assessment of context variables such as ownership structure, the consideration of other periods, and the investigation of other industrial sectors.