The Effect of Corporate Social Responsibility on the Return on Assets of Multinational Companies in Nigeria

Abstract

This study examined the effect of corporate social responsibility (CSR) on the return on assets of multinational companies in Nigeria. The secondary data used were collected from the financial statements of the selected multinational companies and panel data regression technique was adopted. Results revealed negative relationship between corporate social responsibility and the performance of multinational companies. Results further revealed that corporate social responsibility and total liability reduced the return on assets of the multinational companies by 0.01 and 3.33e-04 percent respectively. The probability value 0.477 ˃ 0.05 for the estimated parameter also indicated the statistical insignificance effect of corporate social responsibility on the return on assets of multinational companies. Moreover, the probability value of the F-statistic 0.000 ˂ 0.05 established the statistical significance of the relationship between the corporate social responsibility and the return on assets of multinational companies. Based on the findings, the study concluded that corporate social responsibility was not effective in boosting the return on assets of multinational companies. Therefore, this study recommended that multinational companies should strive to harness the strength of corporate social responsibility by increasing the amount committed to yield the expected result on return on assets.

Keywords: CSR, return on assets, multinational, financial statement, panel data, regression.