CSR AS AN INVESTMENT OR AN EXPENSE: EVIDENCE FROM BANKING SECTOR OF PAKISTAN
Keywords:
Corporate Social Responsibility (CSR), Corporate Social Performance (CSF), Financial Performance, CSR Investment, CSR Expense, Banking Sector, Financial Sector, PakistanAbstract
If engaging in Corporate Social Responsibility (CSR) activities costs at least in short run and it is beyond a firm’s legal obligation then why do firms especially financial services firms engage in CSR activities. This question urges us to investigate the role of CSR in Corporate Financial Performance (CFP) in the banking sector of Pakistan. Therefore, data of 15 banks, listed on Pakistan Stock Exchange, have been collected from annual reports of respective banks’ websites and the State Bank of Pakistan for 6 years from 2009 to 2014. Correlation and regression analysis have been conducted through SPSS software.  Strong correlation between CSR and ROA, Firm Size as well as Firm Age was found out. On the hand, it was revealed that CSR did not have a significant impact on ROA as well as on ROE. The study contributes to the banking sector of Pakistan and gives insights to stakeholders including managers, leaders, investors and general public.
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