Abstract:
Corporate social responsibility (CSR) is a business approach that contributes to sustainable
development by delivering economic, social and environmental benefits for all stakeholders.
This concept has emerged over the past thirty years to occupy a significant role in certain
aspects of the organizational theory. The purpose of this study is to examine the impact
of CSR on firm performance from a developing country’s environment. This study
considered only 12 licensed commercial banks as sample and obtained secondary data
from the financial statements of the licensed commercial banks in Sri Lanka for the period of
2012-2016. Consequently, the quantitative data were employed in the panel data regression
model using E-Views software to scientifically analyse the data to identify the significant
relationship between these two variables. The control variable is firm size, to be consistent
with the previous studies in the literature review. The finding shows that there is no
significant impact of social, economic and environmental variables on firm performance.
Further the results reveal that there is a significant positive association between CSR and firm
performance (ROA) whereas firm size has a negative association with firm performance
(Tobin’s Q).The study illustrates and provides some insights and builds on the literature
in the area of CSR in a developing country’s environment.
