Corporate Social Responsibility and Financial Performance of Macro, Small, and Medium-Scale Enterprises (MSMEs) in Ekiti State, Nigeria

Abstract

The study examined the effect of CSR on the financial performance of MSMEs in Nigeria using Ekiti State as a case. Specifically, the study examined the effect of employees’ health and safety, community development, and environmental remediation on the financial performance of MSMEs. A survey research design was adopted. The population of the study comprises 967,468 registered MSMEs in Ekiti State as of 31^st December 2021 (SMEDAN,2021). A sample size of 400 respondents was selected using Taro Yamane’s formula. Data was obtained from primary sources using a well-structured questionnaire. The Cronbach Alpha test result of an average of 80% confirmed the reliability of the research instrument.  The data collected were analysed using descriptive statistics and OLS regression. The results revealed that employees’ health and safety, community development, and environmental remediation exhibited a significant positive relationship to the financial performance of MSMEs. The study concluded that, the financial performance of MSMEs in Nigeria will increase at the instant of their social responsibility. It is therefore recommended that MSMEs in Nigeria should embrace the philosophy of CSR as a bait to improve their financial performance.

Keywords: Corporate Social Responsibility, Financial Performance, Employees’ Health and Safety, Community Development, Environmental Remediation, MSMEs.

JEL Classification Codes: L25; M14; I13; R11; P18.

DOI: 10.7176/RJFA/13-22-06

Publication date: November 30^th 2022