Impact of corporate social responsibility on financial performance of manufacturing companies in Nigeria

Abstract

This study sought to investigate the impact of Corporate Social Responsibility (CSR) on Financial Performance (proxied by Profit Before Tax and Turnover) in listed Manufacturing Companies in Nigeria. It was also meant to determine if there is any relationship between Firm Size, Firms Age, Leverage and Financial Performance of listed Manufacturing Companies in Nigeria. The research employed an ex-post facto research design. The population of the study was sixty five (65) listed Manufacturing Companies in Nigerian Stock Exchange as at the time of this study, while the sample size was eleven (11). Data were sourced through secondary means of the eleven (11) listed Manufacturing Companies, who consequently report CSR activities for a period of 15 years (2002 – 2016); using random sampling techniques. Data were analysed using panel data estimation framework. The results revealed that there is positive and significant relationship between CSR and Turnover i.e. the coefficient of CSR is 0.041 with P value of 0.000 < 0.01. It also showed that there is negative and insignificant relationship between CSR and Profit before Tax i.e. the coefficient of CSR is -0.043 with P value of 0.0048 < 0.01. Firm Size, Firm Age also have positive and significant relationship with TURN but negative and insignificant relationship between LEVR and TURN; while none of the control variables is a major determinant of PBT during the period. It was concluded that CSR has significant impact on Turnover while it does not have any significant effect on Profit before Tax of listed Manufacturing Companies in Nigeria during the period under review.