Impact of Corporate Social Responsibility Disclosure along with Economic Variables on Sales Performance of Pakistani Non-financial Firms


  • Mahaam Naz University of Karachi
  • Sarah Anjum University of Karachi


In the race of maximizing profits, businesses often face challenges in meeting environmental and social requirements. This paper's main objective is to assess the linkage between Disclosure Index of Corporate Social Responsibility and firms’ performances with respect to sales, in connection with some financial and economic variables as well. Return on Sales has been employed for measuring Sales performance, and CSR has been gauged by the Corporate Social Responsibility Disclosure Index. From 2011 to 2020, information has been collected from forty-one listed companies of Pakistan stock exchange (PSX), pertaining to non-financial sector. For statistical analysis, panel data were utilized. The shareholder theory and agency theory demonstrate that Corporate Social Responsibility (CSR) activities enforce a financial burden on businesses. According to shareholder theory, firms operate merely for the benefit of their stakeholders not for the welfare of the society. Furthermore, theory suggests that firms should prioritize shareholders’ wealth maximization rather than investing over CSR. According to findings of subject study, the private sector's financial development has a substantial optimistic effect on return on sales, but CSR Disclosure Index imposes an adverse effect on sales. Additionally, other variables including liquidity, leverage and size also enforce a negative outcome on sales return. The study's findings can benefit corporate managers and policymakers in making decisions apropos to execution of CSR activities. Moreover, study results lead to a better knowledge of CSR activities for a growing nation, which actively works to improve its financial culture and may facilitate closer ties with financial sector of Pakistan.