The influence of profit sharing in sustaining corporate governance and corporate social responsibility on firm performance: a cointegration approach

Abstract

The study examined the influence of profit sharing in sustaining corporate governance and corporate social responsibility on firm performance in Nigeria. This Study is predicated on the Stewardship and Agency theory. The study disaggregated firm performance into revenue, market share, profitability and cash flow in line with the theories reviewed. The data were obtained from the company review published audit financial report. Collected data covered the period of 27 years spanning from 1992-2019. Based on the mixed level of stationarity of the variables as revealed by the unit root test, the study made use of auto-regressive distributed lag (ARDL) technique to analysis the data. The bound test revealed that; there was presence of co-integration (long-run relationship) among the dependent and all the explanatory variables consequently the study estimated the ARDLECM. The result revealed that market share have positive and non-significant influences corporate governance and corporate social responsibility, the result further showed that Revenue (RVN), Profitability(PRT) and Cash Flow (CFL) had a positive and significant impact on corporate governance and corporate social responsibility in Nigeria which is a clear indication that profit sharing have positive and significant influence in sustaining corporate governance and corporate social responsibility on firms performance both in short and long run. The findings of this study are in tandem with stewardship theory.