ABSTRACT

Corporate Social responsibility CSR is point of attraction towards the scholars many researches
have been made to check the impact of CSR on the firm performance. Different results have
been found some of the people show positive results some of them showed negative results. The
topic of this study is to investigate the relationship between CSR and firm performance with the
moderating effect of ownership structure in the financial sector. The main focus of this research
paper would be on the public listed and private listed firms of investment banks, commercial
banks, insurance companies and mudaraba, regression analysis would be done to check the
association in public and private banks.

1
 Chapter1

INTRODUCTION

Corporate Social Responsibility (CSR) has been the major aspect of attention for the researchers
from past few decades. Corporate social responsibility is the major aspect of corporate
governance. CSR is defined by business dictionary as “a company responsibility towards its
environment and its community”. CSR is generally referred to serving of people and community
of a company or a firm to get better feedback and trust of their employees and customers. CSR
has become one of the important characters of the business world. The firms that are involved in
CSR and its activities are seen well in reputation. Good CSR practices leads to good firm
performance whereas the bad social impact could leads to firm risk and may affect the firm
reputation.
Idea of CSR was started in 1953 when Bowmen publication enlisted the “Social responsibility of
the Business”. He stated CSR as the businessman’s social responsibility and stated that it’s the
responsibility of a businessman to make decisions from the policies to take actions that are
according to the objectives of the society.[ CITATION bow53 \l 4105 ]. Corporate social
responsibility was discussed by Edward Freeman in 1984 while discussing the stakeholder’s
theory. He states that business should be conducted in accordance with the stakeholder’s desires.
If the stakeholders are informed by the CSR activities undertaken in the organization and a
corporation gives its maximum efforts to invest on community, by this way organization can get
maximum trust of their participants ultimately the corporate performance is increased.
[ CITATION Ull85 \l 4105 ][ CITATION Nes91 \l 4105 ]. The CSR activities are concerned
with the excellent corporate governance principles. Revealing information of CSR is compulsory
for every firm because it can reduce the asymmetry information and improve the relationship
among the shareholders and the firm.

2
From previous many years developing economies are more consistent and are facing a lot of
problems and takes burden to disclose CSR evidence [ CITATION Hoo00 \l 4105 ]. Corporate
social responsibility is becoming issue for many organizations because every stakeholder wants
to know everything about the firm in true aspect.[ CITATION Sin14 \l 4105 ] Many extra
associated terms are used for corporate social responsibility by researcher such as corporate
sustainability, corporate philanthropy, Business Ethics, Corporate accountability.
Ownership structure (O.S) is also of major significance in corporate governance because they
affect the incentives of the agents and the efficiency of the firm. Ownership structure is defined
as the distribution of equity with respect of voting power and with the capital and identity of
equity owners. O.S is involved in the decision-making and improvement of CSR related to firm
performance. First time Ownership structure was discovered by [ CITATION Dem26 \l 4105 ]
who said that O.S is determined endogenously. Scholars find the relationship between the OS
and firm performance. Some of them show a positive relationship[ CITATION Sha11 \l 4105 ]
Corporate social responsibility and Ownership structure are the sub type of corporate governance
(CG). There are numerous theories in the literature of CG. There are a lot of differences in the
opinion of different scholars about social responsibility. While looking the past era of research
about the business performance, first of all the [ CITATION Fri70 \l 4105 ] was in the view that
the firm only works for generating its profit CSR was considered as an extra cost that can affect
the firm performance. Stakeholder’s theory suggests there is a positive relationship between the
CSR and firm performance [ CITATION Edw84 \l 4105 ]. Another theory is Social impact
theory that suggests that there is a positive relationship between the CSR and firm performance. [
CITATION Cor87 \l 4105 ]. Agency theory which deals shareholders wealth maximization here
corporate social responsibility is considered as the agency problem because the managers of the
organization invest in CSR to get personal benefits[CITATION Bar \l 4105 ]
Agency theory also suggests that the managerial ownership has the positive association with the
firm performance and is very important for managing shareholders and manager’s
interest[CITATION Jen76 \l 4105 ]. Property right theory suggests that ownership structure has a
positive impact on the firm performance. [ CITATION Cep17 \l 4105 ]. A stakeholder theory
says that firm success is measured by stakeholders such as employee, government, customers,
suppliers and societies. Firms who are having social responsibility try to maintain all

3
stakeholders’ interest that may leads to the better firm performance that can be achieved by
having good ownership structure.[ CITATION Fen18 \l 4105 ]
Theoretical framework:

Social Impact
theory

Stakeholder Corporate Social Agency theory

theory Responsibility

Stakeholder Ownership Agency theory

Theory structure

Property right
theory

Many experiential studies have been done to know the impact of corporate social responsibility
on performance. Different scholars used different methods for checking the relationship between
CSR and firm performance and found differences in results. Some of the these researchers says
that there is the positive relationship among the firm performance(FP) and CSR while some of
them shows the negative impact of CSR on firm performance. Several researchers illustrate the
no impact of CSR on firm financial performance.[ CITATION Ale78 \l 4105 ][CITATION
Tur03 \l 4105 ][ CITATION Orl03 \l 4105 ] .
In developing countries like Pakistan, people are not aware about their rights and duties
regarding CSR. Implementing CSR activities in the organization leads to the better performance

4
of the company. However for Corporate social responsibility studies it is important to know the
key decision making group that is ownership structure. So the main aim of this study is to check
relationship between CSR and FP with the moderating role of ownership structure. Ownership
structure is the main factor of the corporate governance because it includes the corporate
decision making and plays an important role in the improvement of CSR related to FP. Different
studies suggests there is a positive significant relationship between the firm performance and
Ownership structure (OS)[ CITATION Qai17 \l 4105 ]. Ownership structure is divided into two
parts ownership concentration and managerial ownership a negative association is fined between
the managerial ownership and firm performance and insignificant relationship between
ownership concentration and firm performance.[ CITATION Sha11 \l 4105 ]. Another study
gives a positive relationship between the firm performance and managerial ownership.
[ CITATION Leu08 \l 4105 ]
Problem identification and Problem statement:
The purpose of this study is to investigate the impact of corporate social responsibility on the
firm performance with the moderating effect of ownership structure in public limited and private
limited non-financial institutions. The financial sector is important part of country’s economy.
Financial sector in Pakistan contains Banks, Development Finance Institutions (DFIs),
Microfinance Banks (MFBs), Leasing Companies, Investment Banks, Mutual Funds, Modaraba
Companies Exchange Companies, Insurance Companies, Housing Finance, Venture Capital. The
concern of this paper would be on the public listed and private listed commercial and investment
banks of financial sector. There are several reasons to select these sectors because banking sector
performs as the role pillar for an economy, because the growth of industries, investment
formation, agriculture and international trade largely depends on complete footing of the banking
system of a country. It plays the role of hub for smooth functioning of economic activities
nationally and across the globe, and eventual modernization and innovation in the industry has
raised the standard of living. Developing countries like Pakistan and India rarely stick to the code
of government due to lack of honesty and tax payment issues in these conditions there is lack in
completing CSR task. Therefore there is high need to discover CSR activities in countries like
Pakistan and India. As studies shows the positive relationship among the CSR and Firm
performance. Some of them show the negative impact of CSR on firm performance and some
show no effect. [ CITATION Ale78 \l 4105 ] [ CITATION Orl03 \l 4105 ] [CITATION Tur03 \l

5
4105 ]. The problem that arises here why the results between CSR and FP are mixed is there any
factor that makes the relationship weak or strong. This study intends to observe either the public
held companies are containing better CSR activities or the private held companies. This research
paper contributes to the experimental studies about CSR and firm performance relationship as
this research paper is exclusively for the developing countries because CSR helps to reduce
poverty.[ CITATION pai16 \l 4105 ]. This research paper checks the relationship of each
dimension of the CSR with firm performance for this basis we uses the index [ CITATION
Han05 \l 4105 ]. There has been no work done on the public listed and the private listed banks to
check the relationship CSR dimension and Firm performance with mediating role of ownership
structure so this study fills this gap so that people get more information either public listed
companies are more suitable to trust or private limited.
Research Objectives:
 To explore the relationship between CSR and Firm performance
 To discover is there any impact of Corporate Social responsibility on ownership structure
 To investigate the influence of O.S on FP
 To sightsee the effect of CSR on firm performance with moderating role of Ownership
structure

Research Questions:
 Is there any relationship between CSR and Firm performance
 Is there any impact of Corporate social responsibility on ownership structure
 Is there any influence of O.S on the F.P
 Is there any effect of CSR on the firm performance with moderating role of Ownership
structure
Organisation:
This paper is further categorized as the chapter 2 contains the literature review and chapter three
contains the research methodology part.

6
 Chapter2

LITERATURE REVIEW
Corporate Social Responsibility and firm performance:
Many published studies have empirically investigated the relationship between CSR and FP.
This is one of most elaborated researched area in the field of business and management. While
some of the researchers found a positive relationship between the CSR and FP. Some has found a
negative impact while some shows no association among them, for example [ CITATION
Orl03 \l 4105 ] shows a positive relationship between the CSR and firm performance he did
meta-analysis of 52 studies and stated that there is a positive relationship between to aspects.
Another researcher named as[ CITATION Mar03 \l 4105 ] states that from year 1972 to 2002
there are total 109 studies done that considered CSR as an independent variable and FP as a
dependent variable.
Results of this study show that almost (54) of the empirical studies find a positive relationship
with the independent and dependent variable, 28 studies find a non-significant relation between
CSR and FP, 20 studies found mixed relations and only 7 studies find a negative relationship
between them.
There are three kind of thought found in the literature on CSR and firm performance. First
thought found positive association between CSR and FP [ CITATION Pre97 \l 4105 ]
[ CITATION Mut12 \l 4105 ] the second thought is that there is a negative association between
CSR and FP by maximizing its profits by using its resources. [ CITATION Lim11 \l 4105 ]. The
practice of CSR becomes more common not only in developed nations as the creator of this idea,
but also in developing countries initially this idea has begun. The result explained that CSR gives
a positive value for companies. Some studies, [ CITATION Gio \l 4105 ]taken example from
Italy,[ CITATION moh14 \l 4105 ] evidence from Egypt, had concluded that CSR gives better
performance for companies. Widespread research has been done to check the empirical
association and relationship between CSR and firm performance. There are different researches

7
made mostly showed a positive relationship, some of the researches showed a negative impact of
CSR and firm performance because of the usage of different variables that affect the
performance in different ways. Early study [ CITATION Lim11 \l 4105 ]finds a slight negative
relationship between the profitability and corporate social responsibility

Dimensions of CSR and Firm performance:

CSR have different dimension that affects the company’s performance these dimensions include,
social, and ethical, and environment, legal disclosures. These disclosures have different impacts
on the firm performance. Various researches have been made to find the impact of these
disclosures on firm performance. The researchers say there is a positive significant effect of
different CSR dimension to the firm performance. The [ CITATION Pel081 \l 4105 ] points out
that the effect of different CSR dimensions may be separate for firm in different businesses
based on the level of position assigned to each primary stakeholder for business. Result show
that each of the dimensions of CSR separately affects the firm performance. The [ CITATION
moh14 \l 4105 ] has taken evidence from Egypt and stated that CSR dimensions have significant
effect on the firm performance.
[ CITATION Ber991 \l 4105 ] States there is a positive and significant relationship between
CSR and short-term profitability. He also shows that corporate social activity improving
employees’ relations has a positive impact on firm performance. The firm performance has been
affected by the environmental performance. Other things that include the capacity of ecologically
pleasant firms to distinguish themselves by the plan of environmental sustainable products that
plea to their customers and get a competitive edge[ CITATION Bar061 \l 4105 ] suggest that
better environmental performance provides firms good access to important resources, with good
quality employees and prolonged market opportunities. On the other hand[ CITATION Eng1 \l
4105 ] warn of high costs associated with refining environmental performance and the unreliable
returns on those investments. The [ CITATION Fri70 \l 4105 ] argues that environmental
expenses are beyond the profit maximization of the firm it would lead to the firm negative
performance one should only concern with the firm profits maximization. The [ CITATION
Yin121 \l 4105 ] states out that the anticipations from the local and community customers were
far low significant than the anticipation of international buyers. The [ CITATION Bau071 \l

8
4105 ] point out than social, ethical and political and economic factors influence the regulatory
context.

Ownership Structure and firm performance:

Ownership structure (O.S) is also of major significance in corporate governance because they
affect the incentives of the agents and the efficiency of the firm. Ownership structure is defined
as the distribution of equity with respect of voting power and with the capital and identity of
equity owners. O.S is involved in the decision-making and improvement of CSR related to firm
performance. A lot of research work is done to check the relationship between O.S and F.P.
Some researchers found curvilinear relationship [ CITATION Mor88 \l 4105 ] and some found a
positive association of ownership concentration with corporate performance [ CITATION Gor00
\l 4105 ][ CITATION Mit02 \l 4105 ], other found negative association[ CITATION Dem01 \l
4105 ]
Managerial Ownership (M.O) with CSR and Firm Performance:
Managerial ownership is known as the percentage of equity holds by the block holders, managers
and directors. A lot of research work is done on managerial ownership and firm performance.
The [CITATION Jen76 \l 4105 ] has explained agency problems of owners and managers could
be improved by managerial ownership and found a negative relationship between, but
managerial ownership and FP have a positive relationship. Shareholders who have shares carry
right of voting and contribute in shareholder meetings; that why they have additional right of
entry to company management and the right to deal with social responsibility activities. Various
studies have found the relationship between managerial ownership and FP, including a positive
relationship [ CITATION Bha08 \l 4105 ] [ CITATION Leu10 \l 4105 ]. [ CITATION Bau10 \l
4105 ]. The [ CITATION Gar18 \l 4105 ] explored the relationship of managerial ownership and
CSR and found a positive association.
Ownership concentration (O.C) with CSR and firm performance:
Ownership concentration is an important internal governance tool in which owners can govern
and effect the management of the firm to protect their benefits. Ownership concentration is
defined as a proportion of firm shares held by major shareholders.

9
10% or more of the shares of a firm held by the shareholder makes block holder. Ownership
concentration is found to have a positive relation with FP [ CITATION Ber32 \l 4105 ]
Ownership concentration gives an opportunity for managers and block-holders to contribute in
preventing fraud from minority shareholders, therefore, ownership concentration is a vital factor
of corporate governance [CITATION Shl17 \l 4105 ]. The [ CITATION Fen11 \l 4105 ] found
that in Chinese listed companies government ownership is positively related to CSR. The
Pakistani ownership structure is intense at a high level, and firms are mainly organised by family
ownership. The top shareholder percentage is taken to check the effect of financial performance,
and a significant positive association between O.S and FP was found [ CITATION Abb13 \l
4105 ]. In the literature of corporate governance, ownership concentration normally has a
positive connection with FP[ CITATION Pen14 \l 4105 ]. In his study, [ CITATION Gar18 \l
4105 ] found that ownership concentration (O.S) has a positive relation with corporate social
responsibility. The [ CITATION Dam13 \l 4105 ] described that highly concentrated ownership
may lead to lesser CSR actions. In Pakistan [ CITATION Muh17 \l 4105 ] there is a positive
association between CSR and firm performance with moderating role of ownership structure. On
the other hand, the results of[ CITATION Lau16 \l 4105 ] in Brazil tell that CSR is positively
related to ownership concentration. [ CITATION Soh19 \l 4105 ] Worked and found that the
communication of the ownership concentration with CSR has a positive impact on firm
performance.
The purpose of this study is to investigate the impact of corporate social responsibility on the
firm performance with the moderating effect of ownership structure in public limited and private
limited non-financial institutions. Previous studies show the relationship between CSR and FP.
the positive relationship among the CSR and Firm performance. Some of them show the negative
impact of CSR on firm performance and some show no effect. [CITATION Tur03 \l 4105 ].
[ CITATION Ale78 \l 4105 ] [ CITATION Orl03 \l 4105 ] The problem that arises here why the
results between CSR and FP are mixed is there any factor that makes the relationship weak or
strong. This study intends to observe either the public held companies are containing better CSR
activities or the private held companies. This research paper contributes to the experimental
studies about CSR and firm performance relationship as this research paper is exclusively for the
developing countries because CSR helps to reduce poverty.[ CITATION pai16 \l 4105 ].

10
This research paper checks the relationship of each dimension of the CSR with firm performance
for this basis we uses the index [ CITATION Han05 \l 4105 ]. The financial sector is important
part of country’s economy. Financial sector in Pakistan contains Banks, Development Finance
Institutions (DFIs), Microfinance Banks (MFBs), Leasing Companies, Investment Banks, Mutual
Funds, Modaraba Companies Exchange Companies, Insurance Companies, Housing Finance,
Venture Capital. The concern of this paper would be on the public listed and private listed
commercial, investment banks and Insurance companies and Modaraba of financial sector. There
are several reasons to select these sectors because banking sector performs as the role pillar for
an economy, because the growth of industries, investment formation, agriculture and
international trade largely depends on complete footing of the banking system of a country. It
plays the role of hub for smooth working of economic activities countrywide and all over the
globe, and ultimate transformation and improvement in the industry has raised the standard of
living. Developing countries like Pakistan and India rarely stick to the code of government due to
lack of honesty and tax payment issues in these conditions there is lack in completing CSR task.
Therefore there is high need to discover CSR activities in countries like Pakistan and India.
There has been no work done on the public listed and the private listed banks to check the
relationship CSR dimension and Firm performance with mediating role of ownership structure so
this study fills this gap so that people get more information either public limited companies are
good for trust or private limited companies.

11
 Chapter3

METHEDOLOGY

Sample selection and Data Collection:

This paper selected a sample of 112 firms from the four financial sectors of the Pakistani
economy: Commercial banks, Investments banks, Insurance companies and Modaraba. During
sample selection, authors will excluded all firms that did not mention CSR activities in their
annual reports, and firms for which data will not be available or which were declared defaulted
by the Pakistan Stock Exchange (PSX). Furthermore author will select those companies that had
at least 100 million rupees in their outstanding shares, because larger companies with larger
outstanding shares generally publish sustainability reports on their regular basis. Finally, the data
would be collected from the State Bank of Pakistan (SBP), the SECP, sustainability reports, and
companies’ annual reports from their individual websites over the period 2009-2018.
There are several reasons to select the financial sector a vigorous banking sector is a strong sign
for the economy of a country. It is the sector that plays the role of intermediation between the
saver and the lender, which essentially regulate the rate of economic growth. The banking sector
plays an important role in deployment of savings of households from all over the country and
placing them at the disposal of financiers. Banking sector performs as the role pillar for an
economy, because the growth of industries, investment formation, agriculture and international
trade largely depends on complete footing of the banking system of a country. It plays the role of

12
hub for smooth working of economic activities countrywide and all over the globe, and ultimate
transformation and improvement in the industry has raised the standard of living.
Banking sector performs as the role pillar for an economy, because the growth of industries,
investment formation, agriculture and international trade largely depends on complete footing of
the banking system of a country. It plays the role of hub for smooth working of economic
activities countrywide and all over the globe, and ultimate transformation and improvement in
the industry has raised the standard of living.
Conceptual framework:
The diagram listed below shows that the Corporate Social Responsibility is the independent
variable measured by different kind of variables 1) community relationship 2) Environmental
relationship, 3) Employee information 4) Discretionary relationship 5) Ethical relationship and
Financial Performance is dependent variable and is measured by ROA (Return on Assets), ROE
(Return on equity), EPS (Earning per share) whereas the ownership structure has been as the
mediator here and measured by managerial ownership and ownership concentration.

Independent Moderator variable

variable  Ownership
CSR structure
Measures:
 Community Dependent
relationship variable
 Environmental FP
relationship Measures
 Employee
 ROA
information  ROE
 EPS
 Discretionary
relationship
 Ethical
relationship

Control variables 13
 Size
 Leverage
 liquidity
Operationalization:
The variables that have been used in this study are described in four sets. First includes the
description of the dependent variable of this study, second one is basically describing the
independent variable of this study, third part briefly describe the moderator and the fourth part
contains the description of control variables.
Dependent variable:
Dependent variable is the variable that is depending on independent variable, one variable that
have any change because of the change in the independent variable. Firm performance is
measured by two measured one is known as the market measure the other one is recognised as
the market measures. This study only deals with the accounting measure which contains the
Return on Assets (ROA), Return on Equity (ROE), and Earning per Share (EPS). Which
indicates the firm performance, how a firm effectively and efficiently manage their resources, to
manage the asset and equity to get more profit. Performance is also measured by the market
measures which usually use Tobin’s Q but accounting measures are considered more effective
tool to check the profitability of the firm.
Measures of firm performance:
In this study Return on Assets (ROA) ratio is used as one of the proxy variable to measure the
firm performance. It is measured by the following formula

NET INCOME
ROA= TOTAL ASSETS

The same proxy variable is used by [ CITATION moh14 \l 4105 ] [ CITATION Muh17 \l 4105 ]
, [ CITATION Hue17 \l 4105 ][ CITATION Soh19 \l 4105 ]. Many more took the ROA as

14
measuring indicator for assessing either firm is getting their wished outcomes from their total
resources.
Return on equity (ROE) is used as another proxy of firm performance. Return on equity is
measured by the following formula:
NET INCOME
ROE= TOTAL EQUITY

The same proxy is used by [ CITATION Gio \l 4105 ], [ CITATION moh14 \l 4105 ],
[ CITATION Wan16 \l 4105 ] [ CITATION Soh19 \l 4105 ] they all used this variable to check
the efficiency of the firm.
Earnings per share (EPS) are another proxy used in this paper to check the better efficiency and
performance of an enterprise. Following is the formula used for Earning per share (EPS)

NET INCOME−PREFFERED SHARES

EPS= TOTAL NUMBERS OF SHARES

The same proxy variable is used by[ CITATION Wan16 \l 4105 ] to check the performance of
the company.
Independent variable:
Corporate social responsibility is used as an independent variable. Corporate social responsibility
contains activities of a company contributing towards the welfare of the society at a very large
scale and by supporting and protecting the interest of its stakeholders. Immense literature is there
to support that there are many proxies used to measure the corporate social responsibility. The
reason of using numerous proxies for C.S.R may be that it has different numbers of dimensions
for which it can be measured and no single proxy would work best. The main goal of CSR is to
maximize the profit for its stakeholders[ CITATION Gri97 \l 4105 ] and[ CITATION Pre971 \l
4105 ] both of them says that to minimize the risk of liquidation CSR is really effective.
The[ CITATION Han05 \l 4105 ] provides the origin of constructing checklist in this study.
CSR disclosure itself is divided into seven categories namely, environmental, health and safety
of workers, energy, labour, product, community involvement and general public. This study
contains Community relationship, Environmental relationship, Employee information,

15
Discretionary relationship and Ethical relationship, the total numbers of disclosure items that can
be applied to the condition of the companies in Pakistan is 30 CSR items. [ CITATION Muh17 \l
4105 ]. Many researcher identify society related Factors and employed in their study by using
different methodology and maintain an index for checking relationship between CSR and firm
performance. [ CITATION Han05 \l 4105 ] Prepared the CSR checklist in developing countries
and conclude that if the company is disclosing full information of CSR then it will considered as
``1`` and ``0`` if the information is not disclosed.
Σdi 30
CSRDI= nj

Where,
CSRDI= Corporate Social Responsibility Disclosure Index
nj= total item of firm n=30
di= if ith item disclose 0 if ith item is not disclosed

Moderator
The moderator of this study is Ownership structure, Ownership structure is defined as the
distribution of equity with respect of voting power and with the capital and identity of equity
owners. The ownership structure is divided into two parts one ownership concentration and the
other one is managerial ownership. Ownership concentration is measured by top five
shareholders such as the block holder owners, individual owners, family ownership, and director
and supposes ownership is used as proxies for checking ownership concentration. This variable
is being used by [ CITATION Abb13 \l 4105 ], [ CITATION Muh17 \l 4105 ] and [ CITATION
Soh19 \l 4105 ]. Managerial ownership is represented as a portion of share held by managers;
managerial ownership is used by [ CITATION Soh19 \l 4105 ]

Control variables
Previous study suggest that CSR and FP are inclined by some factors such as size, leverage and
liquidity, [ CITATION Ull85 \l 4105 ] Previous studies suggest that these variables can be taken
as control variable. The [ CITATION Tso04 \l 4105 ] takes size of the corporation as control
variables. Size was measured by taking natural log of total assets [ CITATION Tso04 \l 4105 ].

16
The size of the firm may be important for many causes, containing the presence of scale
economies is essential in environmental concerned investments. Further larger firms follow more
CSR practices than small firms.
Size= natural log of total assets
Leverage is a proportion of a company’s entire liability to the total value of asset. This study
took leverage as a control variable because leverage affects the efficiency and attitude of
administrators and companies’ CSR actions, because high level of leverage executes restriction
on directors, and “motivate them to take assessments that are in favor of the corporations”
Furthermore high leverage ratio obliges the executives to take venture decisions to create
different chance, thus negatively impact profits of corporations. Commonly those corporations
which have lower debt are more concentrated for taking the CSR initiatives than those entities
with huge debt proportion. Leverage calculated by total debts divided by total assets,
[ CITATION Tso04 \l 4105 ].
total debt
Leverage=
total assets

In this study the liquidity is also use as a control variable. This is also support by previous
studies such as, [ CITATION Muh17 \l 4105 ] Liquidity ratios are used as a control variable
because it gives uncertain outcomes in previous studies. Liquidity was measured by current ratio
of the companies.
Liquidity= current ratio
Hypothesis formulation:

There are two kind of thought found in the literature on CSR and firm performance. First thought
found positive association between CSR and FP [ CITATION Pre97 \l 4105 ] [ CITATION
Mut12 \l 4105 ] the second thought is that there is a negative association between CSR and FP by
maximizing its profits by using its resources. [ CITATION Lim11 \l 4105 ]. More people had
found a positive association of CSR with FP

H1= There is a positive significant relationship between Corporate social responsibility and
firm performance.

17
The [ CITATION Pel081 \l 4105 ] points out that the effect of different CSR dimensions may be
separate for firm in different businesses based on the level of position assigned to each primary
stakeholder for business. Result show that each of the dimensions of CSR separately affects the
firm performance. The [ CITATION moh14 \l 4105 ] has taken evidence from Egypt and stated
that CSR dimensions (CSRD) have significant effect on the firm performance. Every single
dimension is discussed in literature review.
H2= There is a significant positive relationship between the CSRD and firm performance
H2(a)= There is a positive significant relationship between employee relations of CSR and
firm performance
H2(b)= There is a positive significant relationship between the environmental relations of
CSR and firm performance
H2(c) = There is a positive significant relationship the community relations of CSR and firm
performance
H2(d) = There is a positive significant relationship between discretionary relation of CSR
and firm performance
H2(e)= There is a positive significant relationship between the social and ethical relationship
of CSR and firm performance.
A lot of research work is done to check the relationship between O.S and F.P. Some researchers
found curvilinear relationship [ CITATION Mor88 \l 4105 ] and some found a positive
association of ownership concentration with corporate performance [ CITATION Gor00 \l 4105 ]
[ CITATION Mit02 \l 4105 ], other found negative association[ CITATION Dem01 \l 4105 ]
there are two parts of the ownership structure, managerial ownership and concentration of
ownership. The [ CITATION Gar18 \l 4105 ] explored the relationship of managerial ownership
and CSR and found a positive association. [ CITATION Soh19 \l 4105 ] Worked and found that
the communication of the managerial ownership concentration with CSR has a positive impact
on firm performance
H3= Ownership structure has positive significant effect on the association of CSR and firm
performance
H3(1)= Managerial ownership has a significant and positive effect on the association of CSR
with firm performance.

18
H3(2)= Ownership concentration has a significant and positive effect on the association of
CSR with firm performance

Mathematical equation:
To do regression analysis regression equation is made:
Model 1
𝐹𝑃𝑖𝑡= β1CSRDIit + β2𝐿𝑒𝑣𝑖𝑡+β3Liq𝑖𝑡+β4Sizeit + ε𝑖𝑡
Where,
𝐹𝑃𝑖𝑡= Firm performance i at time t.
CSRDI𝑖𝑡= Corporate social responsibility disclosure index spending of firm i in time t.
Lev𝑖𝑡 = represents leverage Debt to total asset i at time t.
Liq𝑖𝑡= represents liquidity Current assets to current liability i at time t.
Size𝑖𝑡= Size in form of total assets of firm i at time t.
ε𝑖𝑡 =Denote error term of the model.
.
Model 2
𝐹𝑃it= β1CSRDIit + β2OC𝑖𝑡 + β3CSRDI𝑖𝑡*OS𝑖𝑡 + β4Size𝑖𝑡 + β5Lev𝑖𝑡 +β6Liq𝑖𝑡+ε𝑖𝑡
Where,
𝐹𝑃𝑖𝑡= Firm performance i at time t
CSRDI𝑖𝑡= Corporate social responsibility disclosure index spending of firm i in time t
OS𝑖𝑡 =Ownership Structure i at time t.
β3= coefficient of the moderator
Size𝑖𝑡= Size in form of total assets of firm i at time t.
Lev𝑖𝑡 = represents leverage Debt to total asset i at time t.
Liq𝑖𝑡= represents liquidity Current assets to current liability i at time t.
ε𝑖𝑡 =error term of the model.

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