Corporate social responsibility and firm’s financial performance: Moderation of CEO power

Adnan Munawar§ and Faisal Mehmood

Abstract

This study describes that whether the powerful CEO’s are more inclined towards corporate social responsibility practices (CSR) or not, specifically in the context of Pakistan. In addition, this study tests the direct effect of CSR and ownership concentration on firm’s financial performance. Data are extracted from the annual and CSR reports of chemicalsector of Pakistan stock exchange listed over the period 2014-2017. The results indicate that CSR has a strong positive association with the firm’s profitability. Moreover, the CEO power and its moderating role between CSR and firm performance has found insignificant. Ownership concentration has also found no association with firm value. Finally, it proved that neither the powerful CEO nor the ownership concentration has influence over the CSR practices.
Keywords: Corporate social responsibilities, Firm financial performance, Ownership concentration, CEO compensation