CSR DISCLOSURE AND FINANCIAL PERFORMANCE OF COMPANIES IN PAKISTAN AND MODERATING EFFECT OF HIGH AND LOWPROFILE INDUSTRY

Abstract

The aim of this research is to see how Corporate Social Responsibility affects a company's financial performance, as measured by sales growth and return on assets. This study looks at how CSR practices impact a company's bottom line. High- and low-profile companies were introduced to measure the moderation of the findings in this regard. The sample size is made up of five industries and 49 companies listed on the Pakistan Stock Exchange. 15 of the 49 firms are High-Profile, while the other 34 are Low-Profile. Data were gathered for five years, from 2014 to 2018, from their Annual Reports or Sustainability Reports. According to the findings of this study, corporate social responsibility disclosure has no positive or meaningful impact on sales growth or return on assets. Despite the fact that industry classification was used as a moderating variable, CSR was found to be negligible in both Sales Growth and ROA. The study shows that overall CSR activities do not have any significant impact on the financial performance of the company, results are same for the High-Profile and lo-Profile companies, However, but it may have other impacts like good market reputation, stronger brand image, better PR in the market, better position as compared to the competitors but these parameters need a separate study in future. These findings would undoubtedly assist businesses in planning their potential CSR operations. Companies may disclose more about their CSR activities not only through their annual reports or sustainability reports, but also through communicating more on their website, through their products/services, and through other publications or social media. However, CSR can have other effects, such as a positive consumer perception, a stronger brand image, better market PR, and a better position in comparison to rivals, but these variables may require separate research in the future.