Corporate Social Responsibility, Profit After Tax and Return on Asset of Selected Multinational Companies: A Granger Causality Approach

Abstract

This study investigated the causal relationship among corporate social responsibility (CSR), profit after tax and return on assets of selected quoted multinational companies in Nigeria. The data gathered from the financial statements of the selected quoted multinational companies were analysed using granger causality technique. The result revealed that there was no direction causality between profit after tax and corporate social responsibility as well as the return on assets and corporate social responsibility of the selected multinational companies with estimated probability values ranging from 0.065 to 0.999 ˃ 0.05. Based on the findings, the study concluded that profit after tax and return on assets of the selected multinational companies do not granger cause corporate social responsibility or vice visa. This study established that, despite the huge investment and profit made by the selected multinational companies in Nigeria, there was no significant contribution towards the corporate social responsibility of the nation or hosting communities. Therefore, this study recommended that multinational companies should strived to harness the strength of corporate social responsibility by increasing the amount committed to yield the expected result of performance; multinational companies should investe in the infrastructural development and productivity of their operating environments to boost and enhance their performances.

Keywords: corporate social responsibility, profit after tax, return on asset, multinational, financial statement, granger causality.