Effect of Corporate Social Responsibility Disclosure on Financial Performance of Multinational Companies in Nigeria

doi:10.7176/ejbm/13-21-04

Abstract

The study examined empirically the sensitivity of financial performance to corporate social responsibility disclosure of listed multinational firms in Nigeria. The study adopted an ex-post facto research design. Audited annual reports of eighteen (18) quoted firms from 2009 to 2019 formed the relevant period where corporate social responsibility disclosure (CSRD) (donations and other related expense) was used for the explanatory variable of the study. While return on asset (ROA), return on equity (ROE) and profit for the year (PFTY) were used as the dependent variables. The study employed panel least square regression analysis via STATA 13 output to fathom the nature of association between these variables. The results show that ROE and profit for the year are influenced significantly by CSRD. It was discovered that the coefficient of the return on asset is significant and equally indicated a positive effect on CSRD. The study accepts the null hypothesis, which stated that return on asset does not positively and significantly affect corporate social responsibility disclosure of multinational firms in Nigeria. The study recommended that government/regulatory bodies should adjust the minimum percentage of profit liable for taxation / CSRD from their profit for the year. Keywords: Corporate Social Responsibility Disclosure, Financial Performance. DOI: 10.7176/EJBM/13-21-04 Publication date: November 30 th 2021

Highlights

1.1 Background of the Study The debate on the importance of corporate social responsibility (CSR) to the performance of firms of all categories began since the early 1960s (Kenan, Vincent and Muhaheranwa, 2015)
Perez and Del Bosque (2014) posit that corporate social responsibility activities can prompt developments through the utilization of social, ecosystems or sustainability drivers to make new social interventions. It is against this background that this study evaluates the effect of corporate social responsibility disclosure on financial performance of multinational companies in Nigeria
The findings revealed that the rate of compliance of Nigerian manufacturing firms to CSR is more than the rate of noncompliance

Summary

Introduction

1.1 Background of the Study The debate on the importance of corporate social responsibility (CSR) to the performance of firms of all categories began since the early 1960s (Kenan, Vincent and Muhaheranwa, 2015). CSR is a concept that explains the responsibility firms have in order to improve basic welfare within the society in which they operates. It is a management concept whereby firms integrate social and environmental concerns in their business operations and interactions with their stakeholders. Accounting standards in several countries tried to take into consideration the information needs of different types of users, but in the same vein, this study focused on multinational companies in Nigeria. Public companies should make stakeholders and host community regularly inform of all significant results of business activities in the company Meriemand (2014). A more transparent firm will raise funds from financial institutions

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Conclusion