Impact of Corporate Social Responsibility on Financial Performance: A Case Study of Petroleum Industry of Pakistan

Abstract

The study is initiated to gauge the impact of Corporate Social Responsibility (CSR) on financial performance of the listed companies of the petroleum industry. The values of Return on Assets (ROA), Return on Equity (ROE) & Profit after Tax (PAT) of the petroleum industry is used as proxy variable to gauge the financial performance of the firms. Six years data (2014 to 2019 of eight) petroleum companies listed on Pakistan Stock Exchange were selected for the study. Panel data regression (fixed versus random effect) model of longitudinal study strategy is used keeping in view the nature of our secondary data. The selection of the fixed or random effect model for regressing each proxy variable was based on the result of hausman test. CSR was found to be positively and significantly correlated with ROA and ROE whereas, negative and insignificant association was witnessed between CSR and Profit after tax.