Effect of Corporate Social Responsibility on the Financial Performance of Quoted Manufacturing Firms in Nigeria

Abstract

Today, most corporate managers believe that business operations should go beyond the simple prospect of profit making. Yet among manufacturing firms in Nigeria, incorporating the interest of the employee, business partners, customers, shareholders and the society in corporate social responsibility implementation creates difficulty on measuring the real effect of the implementation on the financial performance. Therefore, the study examined the effects of corporate social responsibility on the financial performance of quoted manufacturing firms in Nigeria as at 2018. The study adopted ex-post facto research design. The study used ex-post facto because it relied on secondary data that are quantitative in nature and that had already been documented in the organization. The sample size of the study is based on randomly selecting six listed manufacturing firms that have significantly invested in corporate social responsibility for a reasonable period. The data used are extracted from the annual reports of the sampled manufacturing firms, NSE factbooks and daily official lists of the NSE. The data span for the period of 10 years ranging from 20082018. The study used Multiple Regression Model as the techniques of analysis with the aid of E-View 9 software. The study found that the effect of corporate social responsibility on the financial performance of selected firms is statistically insignificant. This implies that there is insignificant relationship between corporate social responsibility (environmental development, human resource development and community development) and financial performance of selected manufacturing companies in Nigeria. The study concluded that there is insignificant relationship between environmental development, human resource development and community development on the financial performance of manufacturing companies in Nigeria as measured by ROI and recommend among others that companies should embark on more rendering of social responsibility as this could lead to more profitability improvement. Regulatory authorities should come up with clearly defined  
regulations on how to go about social responsibility issues of the companies and the government should also ensure full implementations of the regulations.