Investment in Corporate Social Responsibility and Performance of Quoted Manufacturing Firms in Nigeria

Abstract:

As a result of the dynamic and competitive global economy, which has consequence on performance, firms have embraced investment in corporate social responsibility as a corporate governance tool. This study investigated the impact of investment in corporate social responsibility on performance of quoted manufacturing firms in Nigeria. The study adopted the ex-post facto research design. A sample of twenty firms was selected from a population of fifty manufacturing firms quoted in the Nigerian Stock Exchange (NSE) as at 31st December, 2017. The sample was drawn using three sampling techniques – stratified, proportionate and random sampling technique. The data covering a period of ten years from 2008 to 2017 were sourced from published annual financial reports of the firms selected. The validity and reliability of the data was based on the statutory audit of all the financial statement by qualified auditors and approved by the regulatory authorities. The study adopted descriptive and inferential statistics for data analysis. The study revealed that investment in CSR has a positive and significant impact on employee productivity (Adj. R2 = 0.3726; F-value = 6.6414; p-value = 0.0074). It further revealed that investment in CSR has positive but insignificant impact on profitability (Adj. R2= -0.0181; F-value=0.8304; p-value = 0.4528). The study concluded that manufacturing firms in Nigeria do not view investment in CSR as a strategic tool to improve performance but employed to achieve other corporate objective(s). The study recommended that manufacturing firms in Nigeria should not treat investment in CSR as an optional activity rather it should be integrated as a long-term business strategy.