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Inclusive Examination of the Association Between CSR and Sustainable Financial Performance in Nigerian Consumer Goods Firms

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  • Ajagbe Surajdeen Tunde

    (Department of Banking and Finance, Faculty of Management Sciences, Al-Hikmah University, Ilorin, Kwara State, Nigeria)

  • Bello Modinat Damilola

    (Centre for Research and Development, Kwara State University, Malete, Kwara State, Nigeria)

  • Usman Taofeek Bolaji

    (Department of Banking and Finance, Faculty of Management Sciences, Al-Hikmah University, Ilorin, Kwara State, Nigeria)

Abstract

Business voluntary efforts to improve society and the environment are referred to as corporate social responsibility (CSR). As such, the idea of CSR is embodied in Nigerian enterprises continuous commitment to environmental improvement. Using ten Nigerian consumer goods manufacturers that are listed on the Nigerian Stock Exchange, this study looked at the relationship between CSR and long-term financial success over the course of ten years (2012-2021). The study used panel data and multiple linear regression with E-views software. Economic responsibility has a small and negative impact on ROA, whereas legal duty has a substantial and beneficial impact, per the study. ROA is positively and significantly impacted by ethical duty as well. The analysis also showed that while legal obligation has a negligible but modest impact and ethical responsibility has a slight but favorable impact on ROE, economic responsibility has a considerable and positive impact on ROE. Since there is a clear correlation between moral responsibility and business success, research on return on assets (ROA) suggests that it should be encouraged. Legal responsibility and the firm’s performance are positively correlated, albeit this relationship is not statistically significant. The ROA research indicates that since it greatly enhances business performance, economic responsibility ought to be encouraged. The organization needs to manage legal liabilities to get the intended results. There was positive association between business performance and ethical responsibility, even if it was not statistically significant.

Suggested Citation

  • Ajagbe Surajdeen Tunde & Bello Modinat Damilola & Usman Taofeek Bolaji, 2023. "Inclusive Examination of the Association Between CSR and Sustainable Financial Performance in Nigerian Consumer Goods Firms," Timisoara Journal of Economics and Business, Sciendo, vol. 16(1), pages 85-98.
    • Handle: RePEc:vrs:timjeb:v:16:y:2023:i:1:p:85-98:n:1005
    DOI: 10.2478/tjeb-2023-0005
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    References listed on IDEAS

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    1. Jong-Seo Choi & Young-Min Kwak & Chongwoo Choe, 2010. "Corporate social responsibility and corporate financial performance: Evidence from Korea," Australian Journal of Management, Australian School of Business, vol. 35(3), pages 291-311, December.
    2. Peter Kekung Bessong & Arzizeh Tiesieh Tapang, 2012. "Social Responsibility Cost and Its Influence on the Profitability of Nigerian Banks," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 3(4), pages 33-45, October.
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    Keywords

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    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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