Unveiling the Effectiveness of Agency Cost and Firms’ Size as Moderators Between CSR Disclosure and Firms’ Growth

The excellence of corporate governance in companies lies in their ability to adopt the corporate social responsibility (CSR), which enhances their growth. This study examines the effect of agency cost, firm size, and CSR disclosure on the firms’ growth. Specifically, the study analyzed the agency cost and firms’ size as the moderators that influence the firms’ performance asymmetrically. In its approach, the study compiled data of 300 Pakistani listed companies, which have a significant concern with CSR for the period 2010–2018. Using the 2SLS and GMM instrumental panel regressions, our empirical results show that the agency cost is detrimental to the firms’ growth. In contrast, the firms’ size boosts the firms’ growth. Moreover, the growth of firms with leverage declines and the presence of independent directors improves the firms’ growth.