Impact of CSR Disclosure Reports on Corporate Financial Performance with Moderating Role of Competitive Pressure. Evidence from Non-Financial Firms of Pakistan

Abstract

This study investigates the relationship between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP) among non-financial firms listed on the Pakistan Stock Exchange (PSX) from 2019 to 2024, with a particular focus on the moderating role of competitive pressure. Using a purposive sampling technique, the research employs correlation analysis and panel data regression to assess the impact of CSR on financial performance. The findings reveal a significant relationship between CSR disclosure and financial performance, with competitive pressure significantly moderating this relationship. This study provides valuable insights for non-financial firms by demonstrating how effective CSR integration can enhance financial outcomes, and how leveraging CSR can serve as a strategic tool for gaining a competitive edge. It also highlights the importance of balancing CSR initiatives with financial performance to achieve optimal results. In highly competitive markets, amplifying CSR efforts may help firms distinguish themselves and improve their financial performance. These insights can guide firms in developing and implementing evidence-based CSR strategies that align with both their social and financial goals.

Keywords: Corporate Social Responsibility, Competitive Pressure, Financial Performance, Pakistan Non-Financial Firms