DefinePK

Abstract

 This study checks the CSR impact on the financial performance of thefinancial sector in the moderator effect of earning management. Thepublic and financial sector companies active in CSR have invested mostof their capital in the financial industry. A sample of fifty financialfirms from the banking, insurance, and mudaraba sectors that are listedon the Pakistan Stock Exchange from the period 2010 to 2023 was usedin this study. Correlation and panel regression analysis were employedfor the study. CSR has a positive but insignificant impact on themarket's financial performance. Earning management has a negativeassociation with accounting measures of financial performance, whileearning management has a positive association with market-basedmeasures of financial performance. Earning management is related toaccounting measures, whereas market-basis measures depend oninvestors' perceptions. Hausman-test results of the model show apositive but insignificant impact of CSR on the financial performanceof the financial sector in moderating the role of earning management.The findings of this study highlight the importance of CSR becauseCSR has a positive association with the long-term financialperformance of firms. The bulk of cash in the financial industry hascome from public and financial sector enterprises engaged in corporatesocial responsibility.