Impact of Corporate Social Responsibility on Firms Financial Performance and Shareholders wealth

Abstract

Our research has the basic purpose of finding the impact of corporate social responsibility on shareholders wealth and firms financial performance. We have selected three variables consisting of independent variable (corporate social responsibility), and dependent variable (firms financial performance and shareholders wealth) to conduct our research to find out the impact of Corporate Social Responsibility on Shareholders wealth and Firms Financial Performance. We tried to examine the effect either it is positive or negative between social corporate responsibility and shareholders wealth, firms financial performance. We have selected the sample of 10 firms that are highly rated as corporate social responsibility firms and 10 Non corporate social responsibility firms and evaluate their financial performance measures in accounting terms like ROA and ROE and shareholders wealth measures like EPS and stock price and try to find out whether there is any difference present between financial performance and shareholders wealth in CSR and Non CSR firms and supports our results by doing previous literature survey about that topic. Our research result shows the significant positive relationship between Corporate Social Responsibility and firm’s financial performance and shareholders wealth.

Keywords: Corporate Social Responsibility, Firms Financial Performance; Shareholders Wealth, Corporate Social Responsibility Firms, Non- Corporate Social Responsibility Firms.