Beyond the business case? Retracing the walk of Corporate social responsibility and financial performance relationship in the Oil and Gas sector

Abstract The relationship between corporate social responsibility (CSR) and financial performance (FP) has not been thoroughly investigated in the literature. In particular, the nature of the relationship between the two constructs has not been investigated in depth. Therefore, drawing on the resource‐based view and Stakeholder theory, this study theoretically and empirically examined the relationship between economic perspective of CSR and FP analyzing the mediating role of competitive advantage under the empirical settings of the downstream Oil and Gas companies of Pakistan. Based on the 178 responses from the managerial level employees of these firms, the empirical outcomes stands with the assumption of the study that the implementation of CSR in the Oil and Gas industry is economically driven and have a positive relationship with FP, while competitive advantage partially mediates the relationship between economic CSR and FP. The outcomes of the study carry the important managerial and practical implications for Oil and Gas firms which are fallen in the business case.