UNDERSTANDING THE RELATIONSHIP BETWEEN CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE

The proclivity for writing this paper is to evaluate the association of the two variables; corporate social responsibility (CSR) and corporate financial performances (CFP) of Mari Petroleum Company Limited (MPCL), one of the largest oil & gas exploration companies in Pakistan, listed in all three stock exchange of Pakistan: Karachi stock exchange (KSE), Lahore Stock exchange (LSE) and Islamabad Stock Exchange (ISE). Based on the annual reports of the (MPCL), the company appears to be more committed to its CSR activities for the wellbeing and welfare of the society, healthcare of employees, environment protection. To examine the relationship of CSR and CFP for the Mari Petroleum Company Limited, the secondary data has been extracted from the annual reports of each year published by the company for the period of six years from 2012-2017, annually. The variables for the analysis of the relationship included are: CSR, as an independent variable of the model; indicators used to measure CSR performance of the company are; sum of annual contribution and spending of MPCL on CSR activities in term of donation, salary, wages and benefits, social welfare, and CFP as independent variable of the model; indicators used to measure the financial performance of the company are: Net profit, Net Profit Margin and Total Asset of MPCL. Correlation and regression analysis of the log-log model has been used to figure out the association and the nature of the relationship between these two dependent and independent variables.