EXAMINING THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON SUSTAINABLE FINANCIAL PERFORMANCE: THE MODERATING ROLE OF FINTECH ADOPTION IN PUBLIC LISTED OIL AND GAS COMPANIES IN PAKISTAN

Abstract

This study examines the influence of Corporate Social Responsibility (CSR) on sustainable financial performance, with a specific focus on the moderating effect of FinTech adoption in publicly listed oil and gas companies in Pakistan. Using panel data from five major firms covering the period 2010 to 2024, the research applies Random Effects regression analysis to assess the individual and interactive effects of CSR dimensions—economic, legal, and ethical—on key financial performance indicators: Return on Assets (ROA) and Return on Equity (ROE). The study further explores how FinTech adoption, measured by the integration of blockchain, digital finance tools, and AI-based reporting systems, enhances or modifies the relationship between CSR and performance. The findings reveal that CSR practices have a significant influence on financial outcomes, but their impact varies across different dimensions and performance indicators. Economic and legal responsibilities positively influence ROA, while ethical responsibility has an adverse effect. Conversely, ethical CSR practices significantly boost ROE, suggesting long-term shareholder value is strengthened through ethical conduct. FinTech adoption is shown to enhance both ROA and ROE, highlighting its role as a strategic enabler of CSR effectiveness. The interaction of CSR and FinTech reveals a complementary relationship that can transform CSR from a cost center into a performance-enhancing strategy. Additionally, firm size and market capitalization exhibit distinct effects on financial metrics, reinforcing the importance of organizational context. The study contributes to theoretical frameworks by integrating stakeholder theory, legitimacy theory, and resource-based view (RBV), and empirically validates the significance of digital transformation in corporate sustainability strategies. It also fills critical research gaps in the South Asian context by offering a sector-specific analysis and introducing FinTech as a moderator in the CSR–performance nexus. Practical implications suggest that policymakers, regulators, and firm managers should promote both CSR initiatives and FinTech adoption to achieve sustainable financial growth in high-risk, capital-intensive sectors like oil and gas. Overall, the research provides a robust foundation for advancing corporate governance and responsible finance in emerging markets.

Keywords: Corporate Social Responsibility (CSR), FinTech Adoption, Sustainable Financial Performance, Return on Assets (ROA), Return on Equity (ROE), Oil and Gas Sector, Random Effects Model, Pakistan, Stakeholder Theory, Digital Transformation