The Corporate Social Responsibility and Its Impact on Financial Performance: A Case of Developing Countries

Chao Ma, Mazhar Farid Chishti (), Muhammad Kashif Durrani, Rizwana Bashir, Sofia Safdar and Rana Tanveer Hussain
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Chao Ma: School of Economics and Management, University of Science and Technology Beijing, Beijing 100083, China
Mazhar Farid Chishti: Department of Management Sciences, Lahore Garrison University, Lahore 54000, Pakistan
Muhammad Kashif Durrani: School of Business and Management Sciences, Minhaj University, Lahore 54000, Pakistan
Rizwana Bashir: Department of Management Sciences, Lahore Garrison University, Lahore 54000, Pakistan
Sofia Safdar: Department of Management Sciences, Lahore Garrison University, Lahore 54000, Pakistan
Rana Tanveer Hussain: School of Business and Management Sciences, Minhaj University, Lahore 54000, Pakistan

Sustainability, 2023, vol. 15, issue 4, 1-18

Abstract: In developing nations, environmental policies have not given nearly enough consideration to the role that environmentally friendly innovation plays. Green innovation and long-term financial performance are extremely dependent on one another. Despite the fact that numerous studies have investigated the impact that a variety of corporate social responsibility (CSR) activities have had on environmental sustainability, relatively few have investigated the implications of green innovation strategies and sustainability. From the mid-2021 through to mid-2022, information was gathered from 184 businesses listed on the Pakistan Stock Exchange (PSX) across 12 different industries. Estimates of the results were obtained by the use of structural equation modeling using partial least squares (PLS-SEM). The outcomes of the study indicated that all parts of CSR were positively significant in the process of fostering environmentally sustainable growth, with the exception of one aspect of CSR that was directed toward customers. Additionally, sustainable development contributes to the mediation impact that green innovation has, making this effect even more powerful. The data show that CSR activities have an exceptional impact on financial performance (FP) in all aspects other than one, and that green innovation (GI) also has a high-quality impact on FP, which demonstrates the significance of CSR practices in enhancing sustainable environment.

Keywords: corporate social responsibility; green innovation; environmentally sustainable development; developing countries; PSX (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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