CORPORATE SOCIAL RESPONSIBILITY AND CORPORATE FINANCIAL PERFORMANCE: THE NIGERIAN EXPERIENCE

Abstract

Strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment where they are pressured. This paper attempts to demonstrate empirically the impact of corporate social responsibility on firms financial performance. The paper adopted a pooled panel survey research design method. Annual reports of twenty nine (29) sample firms from 2005 to 2010 formed the source of data collection where CSR (donations), earnings per share (EPS), size, tang, and leverage for 174 observations were used for the computational experiment. The data collected for this study were analyzed using the panel data regression analysis. The result indicated that corporate social responsibility (CSR) has little impact on the sample firms’ EPS. The study concluded that the performance of EPS is higher than the independent variables (CSR, Lev, size, and tang) from the analysis result because lower coefficient of variation infers higher performance, consistency and efficiency of result. The paper recommends amongst others that corporate organizations should be involved in SR by spending reasonable amount of their revenues on social responsibility as this will in turn lead to increase in earnings as defined by the triple-bottom-line reporting.