Corporate Social Responsibility and Financial Performance of Listed Oil and Gas Companies in Nigeria

Abstract

The entire well-being and earnings from operations comprises a company’s financial performance. It entails effective resource allocation and use to fulfill objectives, resulting in increased profitability. Literature has shown that listed Oil and Gas companies in Nigeria has been recording fluctuations in their financial performance which has affected achieving the objective of the shareholders and also the object of firm maximization. Studies have also shown that not many companies in the oil and gas sector have integrated Corporate Social Responsibility (CSR) in their operations. This study estimated the effect of CSR on the financial performance of the listed oil and gas companies in Nigeria from 2011 to 2022. This study filled the gap by identifying the financial benefits a company derived from CSR with the objective which investigated the relationship between them. The 11 oil and gas companies with primary listings on the Nigerian Exchange Group (NGX) form the population for the analysis. Secondary data from the publicly available annual reports of the Nigerian Exchange Group (NGX) was utilized for this study. The study utilized panel regression analysis, and the Hausman test for specification was performed. The results revealed that health and safety initiatives had a significant beneficial impact on the financial performance of Nigeria’s listed oil and gas companies {Adj R2=; F{df)=, p= 0.0000) According to the findings of -1.8643589 of EVE regression study, investments in CSR have a small, negative effect on the financial performance of publicly listed oil and gas companies in Nigeria. The prob. Value of 0.0018623, 0.0000000 and 0.5975882 indicated that both employee expenditures and health and safety significantly affected the financial performance of oil and gas companies in Nigeria. The research concluded that corporate social responsibility (CSR) had a significant impact on the financial performance of oil and gas companies listed on Nigerian Exchange Group (NGX) and thus listed oil and gas companies in Nigeria would benefit financially from increased social responsibility measures if they are well implemented [In stating for the hypotheses, you will give the following statistics results: Adj R2, F statistics with the degree of freedom (df), and p-value as stated above} The study Concluded that CSR has influence on financial performance of listed oil and gas companies in Nigeria. The study recommended that Nigeria should include corporate responsibility in their policy statements and back it up with a well-organized budget in order to enhance their financial performance.