Corporate Social Responsibility and the Performance of Non-finance Firms in Nigeria

Abstract

This study assessed the effect of corporate social responsibility on organizational performance by means of expo-facto research design. Secondary data of seventy-five (75) listed non-finance firms were obtained for the period 2010-2019. Corporate social responsibility (CSR) variants of local community disclosure, social donations and gifting, employees training disclosure, and health and safety disclosure, and performance proxies of gross profit margin, profit before tax margin, return on equity, and earnings before tax margin were obtained from the annual reports and accounts of the listed non-finance firms. The yearly panel data obtained was analyzed using both descriptive and inferential statistics. The fixed and random effects result indicated that while corporate social responsibility significantly affects gross profit margin, profit before tax margin and earnings before tax margin, insignificant effect was found for the return on equity. Given the findings of the study, it was recommended among others that firms should gear efforts toward providing sustained and enhanced social responsibility activities in the areas of employees’ health and safety, community development projects, customers’ complaints, and social donations and gifting in order to attain maximum performance as well as competitive advantage. Again, firms should see CSR as a dynamic investment which promotes crucial attitudes of employees, local community and consumers, instead of simply being a cost to the firm.