THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON FINANCIAL PERFORMANCE OF MANUFACTURING FIRMS IN NIGERIA

Abstract

The aim of this study was to empirically evaluate the effect of corporate social responsibility on financial performance of manufacturing firms in Nigeria. The objectives of this study were to determine the relationship between corporate social responsibility, firm size, firm profitability and Financial Performance of manufacturing firms in Nigeria.  Samples of five (5) manufacturing firms quoted on the Nigerian Stock Exchange were conveniently selected for a period of six (6) years (2015 – 2020). The Panel Least Square (PLS) regression technique was employed in estimating the data and testing the formulated hypotheses. Based on the analysis, we found that there is a positive and insignificant relationship between corporate social responsibility, firm size and financial performance of manufacturing firms in Nigeria; while the variable of profitability exhibited a positive and significant relationship between it and financial performance of manufacturing firms in Nigeria. In line with the findings, the researcher recommended that government as well as regulatory authorities of corporate organizations should make the issue of corporate social responsibility mandatory/compulsory for the entire listed companies in Nigeria in general and the oil and gas firms in particular. This will compel the manufacturing firms to give back to the society in which they operate and polluted by the activities of their operations.