CORPORATE SOCIAL RESPONSIBILITY PRACTICES AND THEIR EFFECTS ON FINANCIAL PERFORMANCE. A STUDY OF DEPOSIT MONEY BANKS (DMBS) IN NIGERIA
Abstract
This study investigated the effect of corporate social responsibility (CSR) practices on financial performance of deposit money banks (DMBs) in Nigeria from 2012 to 2023. The study population comprised 25 quoted DMBs listed on the Nigerian Exchange Group (NGX), with a sample size of 8 DMBs selected based on annual reports. Secondary data from audited financial statements and NGX publications were utilized, with variables including CSR expenditures, Return on Assets (ROA), Return on Equity (ROE), Earnings Per Share (EPS), and firm size. Panel data analysis employing Ordinary Least Squares (OLS) regression techniques revealed a significant negative relationship between CSR expenditure and both ROA and ROE, indicating that higher CSR spending was associated with lower financial performance in terms of these metrics. respectively, suggesting a detrimental effect of CSR expenditure on ROA and ROE. However, no significant effect was observed on EPS. The study recommended that strategic alignment, efficiency, stakeholder engagement, a long-term perspective, and continuous monitoring of CSR programs for DMBs to balance social responsibility with financial sustainability effectively.
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Published in UNIPORT JOURNAL OF BUSINESS, ACCOUNTING & FINANCE MANAGEMENT
ISSN: 1596-9911
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