An Empirical Study Of Impact Of CSR On The Performance Of Pakistani Listed Firms

The splendid corporate governance mechanism endeavors to orientate the firms to engage in such practices of corporate social responsibility(CSR)that are inevitable for confronting the dynamic business environment.Remarkably,the advanced countries and emerging economies are emphasizing on their listed firms to endorse socially responsible activities so that firms may attain the sustainable performance while revitalizing through competitive advantage.Accordingly,the current study unveils the effect of corporate social responsibility(disclosure and performance)on the financial performance of the firm in emerging economy.Specifically,the study analyzes the impact of Innovation input,innovation output,firm’s size and impact of agency cost as the moderators that influence the firms’ performance asymmetrically.The study has compiled the data of 502 Pakistani listed companies,which have a significant concern with CSR for the period 2009–2018.In Pakistan,the performance of state-owned organizations is exacerbating gradually.Henceforth,the total listed companies have been segregated into state-owned-enterprises(SOEs)and non-stateowned-enterprises(non-SOEs)to contemplate different sectors separately.Previously SOEs and non-SOEs have not been analyzed independently.Intuitively,we have selected all major expenses(Innovation input,innovation output,Firm Size,Agency Cost)of the firms which are the cause of bone of contention between management of the firms and investors.The main idea is to signify which expenses are boosting the firms’ financial performance and which are only a burden so that managers should ameliorate their strategy to reduce the extra burden on firms’ performance which will ultimately escalate financial performance.Our empirical results indicate that corporate social responsibility performance boosts the firms’ financial growth,specifically the performance of non-state-owned enterprises has remained positively significant.Meanwhile,corporate social responsibility has also augmented the firms’ performance but only for non-SOEs.Reciprocally,state-owned-enterprises have shown insignificant results.Comprehensively,innovation input has decelerated the performance of non-SOEs firms while innovation output has shown insignificant results.Intuitively,the moderating impact of agency cost has been signified to be detrimental to the firms’growth.Significantly,the impact of agency cost has only been examined among non-State-owned enterprises.On contrary,the size of the firm enhances the financial growth of non-state-owned enterprises.Moreover,leverage declines the firms’growth vehemently while the presence of independent directors improves the firms’growth.Remarkably,implication of the study recommends to ameliorate the corporate mechanism of Pakistani state-owned enterprises so that legitimacy theory may be prevails emphatically.