Effect of Corporate Social Responsibility Disclosure on Financial Performance of Multinational Companies in Nigeria

Abstract

The study examined empirically the sensitivity of financial performance to corporate social responsibility disclosure of listed multinational firms in Nigeria. The study adopted an ex-post facto research design. Audited annual reports of eighteen (18) quoted firms from 2009 to 2019 formed the relevant period where corporate social responsibility disclosure (CSRD) (donations and other related expense) was used for the explanatory variable of the study. While return on asset (ROA), return on equity (ROE) and profit for the year (PFTY) were used as the dependent variables. The study employed panel least square regression analysis via STATA 13 output to fathom the nature of association between these variables. The results show that ROE and profit for the year are influenced significantly by CSRD. It was discovered that the coefficient of the return on asset is significant and equally indicated a positive effect on CSRD. The study accepts the null hypothesis, which stated that return on asset does not positively and significantly affect corporate social responsibility disclosure of multinational firms in Nigeria. The study recommended that government/regulatory bodies should adjust the minimum percentage of profit liable for taxation / CSRD from their profit for the year.

Keywords: Corporate Social Responsibility Disclosure, Financial Performance.

DOI: 10.7176/EJBM/13-21-04

Publication date: November 30^th 2021