The purpose of this paper is to describe the nature and trend of corporate social responsibility (CSR) practices in Nigeria. The second objective of this paper is to examine the relationship between the dimensions of CSR disclosures and corporate financial performance (CFP) among Nigerian listed companies.
To carry out this research, content analysis was conducted to extract CSR and financial data from annual reports of 68 companies listed on the Nigeria Stock Exchange. Financial data were cross-referenced with the NSE Factbook. CSR indexes and financial performance measures were computed for estimation of the regression analysis equation. The percentages were used to describe the nature and trend of CSR practice in Nigeria. This was followed by the hierarchical multiple regression analysis to examine the relationship between CSR and CFP.
The results of the descriptive statistics show that the listed companies used CSR initiatives to communicate social performance to their stakeholders. From the regression analysis, community involvement disclosure, products and customer disclosures and human resource disclosures were found to enhance CFP. The results also reveal a negative relationship between environmental disclosure and CFP, which indicates that disclosure of environmental impact information could be value destroying in Nigeria.
The major limitation of this paper is the sample size. Also, failure of corporations to disclose CSR in the annual reports will have a material effect on these findings.
The findings of this paper have practical implications on the management of Nigerian companies to re-think and re-strategize their CSR policies that incorporate social and economic performance to improve their CFP.
This paper has implication on stakeholders in validating the corporate citizenship of corporations based on the level of commitment and participation in CSR initiatives. Also, findings of this paper will alert the enforcement agencies on the status of CSR practices in Nigeria. Government in collaboration with private and public agencies should consider the needs for CSR framework and database to guide social and environmental reporting in the country.
The paper has examined the relationship between CSR and CFP based on CSR dimensional approach. Aspect of human resource and products/customers CSR has been neglected in the context of Nigerian CSR research. This paper makes valuable contribution by offering new and fresh insight on these dimensions.
Usman, A. and Amran, N. (2015), "Corporate social responsibility practice and corporate financial performance: evidence from Nigeria companies", Social Responsibility Journal, Vol. 11 No. 4, pp. 749-763. https://doi.org/10.1108/SRJ-04-2014-0050Download as .RIS
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