The Triple Impact: Managerial Ability, CSR, and Capital Structure on Firm Performance

In this research endeavor, we delve into exploring how CSR acts as a moderating force and capital structure assumes a mediating role in shaping the interplay between managerial ability and firm performance. Utilizing data from 219 non-financial firms listed on the Pakistan Stock Exchange from 2008 to 2021, we employ fixed-effect regression with robust standard errors to mitigate concerns of heteroscedasticity and autocorrelation. Our findings unveil a compelling narrative: managerial ability and capital structure positively influence firm performance, with capital structure acting as a partial mediator in the relationship. Additionally, a positive correlation is observed between CSR and firm performance, while the interaction between managerial ability and CSR shows a positive, though weakly significant, correlation with firm performance This research significantly contributes to the literature by emphasizing the influence of managers on capital structure and the importance of reporting CSR activities in decision-making processes. It enhances our comprehension of these interactions, providing valuable insights into their critical roles within modern business environments.