An Analysis of Corporate Social Responsibility and Firm Performance with Moderating Effects of CEO Power and Ownership Structure: A Case Study of the Manufacturing Sector of Pakistan

Sohail Ahmad Javeed and Lin Lefen
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Sohail Ahmad Javeed: College of Finance, Nanjing Agricultural University, Nanjing 210095, China
Lin Lefen: College of Finance, Nanjing Agricultural University, Nanjing 210095, China

Sustainability, 2019, vol. 11, issue 1, 1-25

Abstract: Corporate social responsibility (CSR) are the activities of firms that are not only considered for economic profit but also include the social welfare returns. To find the key drivers that affect the relationship between corporate social responsibility (CSR) and firm performance, we investigated the moderating effects of CEO power and ownership structure. Ownership structure is classified into two parts: managerial ownership and ownership concentration. We selected a sample of firms from eight manufacturing sectors of the Pakistani economy for the analysis. We collected data from the State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), Pakistan Stock Exchange (PSX), and companies’ annual reports over the period 2008 to 2017. We employed the Fixed Effects model and Generalized Method of Moment (GMM) to investigate the association between CSR and firm performance. The empirical analysis of this study highlights the following conclusions: First, CSR has a significant positive association with firm performance. Second, the relationship between CSR and firm performance shows the same results with the interaction of CEO power. Thirdly, interaction of the managerial ownership with CSR has a significant positive relationship with firm performance. Fourth, the interaction of the ownership concentration with CSR has a positive effect on firm performance.

Keywords: social contribution value per share; firm performance; CEO power; ownership structure; developing country; manufacturing sector (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (42)

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