Impact of Corporate Social Responsibility on Firm Performance: Role of Environmental and Internal Social Responsibility
Impact of Corporate Social Responsibility on Firm Performance: Role of Environmental and Internal Social Responsibility

Summary/Abstract: This study focuses only on internal social and environmental aspects of corporate social responsibility as per general orders 2009 to define the CSR of a firm. Using the hand collected data of non-financial listed companies of Pakistan Stock Exchange from their annual reports from 2010 to 2015; this study finds that CSR is significantly positive impact on firm performance across all three proxies, while the relationship is stronger for Tobin Q as compared to return on assets and return on sales. It means that the firms those have higher levels of CSR disclosure tend to have higher market value because of overwhelm response from stakeholders, which not only improves the image of the company but also enhances client loyalty. Moreover, this study finds no significant difference in the findings of internal social and environmental disclosure, but the significant positive impact of internal social disclosure and environmental disclosure on firm performance suggests that Pakistani firms keep in mind agency as well as legitimacy theoretical prospects at the time of designing their CSR strategies

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