Abstract:
In present business context most of the business organizations are engaged in
different kind of corporate social responsibility programmes voluntarily.
There is no any law or government influence that the organizations must
perform or engaged in corporate social responsibility activities. For those
activities businesses incurred their financial resources and other non-financial
resources. Most of the researchers researched on the relationship between
corporate social responsibility and the financial performance because in
general corporate social responsibility activities are cost to any company.
There are many studies supporting for different types of relationships between
the corporate social responsibility (positive, negative and neutral) and
financial performance. For this analysis, it was selected 20 listed companies,
in the S&P SL 20 in the Colombo stock exchange and for this analysis it was
considered annual report data for the period from 2011 to 2015. This analysis
mainly focussed on three regression models to test the relationship between
the corporate social responsibility and the financial performance. These
models represent the regression results of relationship between the corporate
social responsibility and profit after tax, relationship between corporate social
responsibility and return on assets and relationship between the corporate
social responsibility and return on equity. Research findings shows that there
is a positive relationship between the corporate social responsibility and profit
after tax and negative relationship with return on assets and return on equity.
Therefore it is concluded that, there is a relationship between the corporate
social responsibility and financial performance of the companies.
