Corporate Social Responsibility Expenditure and the Financial Performance of Quoted Firms in Nigeria

International Journal of Research and Innovation in Social Science (IJRISS) | Volume IV, Issue IV, April 2020 | ISSN 2454–6186

Corporate Social Responsibility Expenditure and the Financial Performance of Quoted Firms in Nigeria

Prof. Oladele P.O¹, Mokuolu J.O^2
1Department of Business Administration, Faculty of Management Sciences, Federal University, Oye-Ekiti, Nigeria
²Department of Banking and Finance, Faculty of Management Sciences, Ekiti State University, Ado-Ekiti, Nigeria

Abstract:-The study assesses the impacts of corporate social responsibility (CSR) on the financial performance of some quoted firms in Nigeria. The study focuses on oil and banking sectors being the two sectors that mostly dominate the CSR activities in Nigeria. Profit after tax of the firms is used to proxy their performance while total expenditure on CSR, total asset, working capital and leverage ratio are used as independent variables in the model. Panel data analysis is adopted as the major estimating techniques and the results show that CSR expenditure of the firms though, have positive impacts on their performances but the effect is not significant. Total asset of the firms remains the most significant variable on their performances. The study also showed that the banking sector is more organized and unique in their approaches to CSR and its implication on their performances is more than the oil firms. It is recommended that firms in Nigeria should engender ways to make their CSR expenditure impact positively and significantly on their performances and relevant authorities should also beam more search light on the oil sector where diverse approaches to CSR exist.

Key words: Corporate Social Responsibility, Banking Sector, Oil sector, Performances

I. INTRODUCTION

In today’s global world, organizations have many challenges to operate and earn profits. People have more knowledge about organizations, their products and services and the way organization’s operate their businesses. People are more conscious about an organization’s work for the prosperity of the society, the environment in which they operate and earn profits. Hence, companies are facing many problems with a new role, which is to fulfill the demands of the present generation in a socially responsible way. Organizations must take responsibility for the ways they operate in the societies and natural environment because their operations impact societies and the natural environment.

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