EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON FINANCIAL PERFORMANCE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA

Abstract

This study investigates the effect of Corporate Social Responsibility (CSR) on the financial
performance of listed Deposit Money Banks (DMBs) in Nigeria. Specifically, the study examines
the effect of environmental management systems, and community development initiatives, on
return on assets. An archival research design was adopted. Data for the study were obtained from
the annual reports and accounts of listed deposit money banks in Nigeria for the ten years (2013–
2022) period. The study used a census sample of 12 listed deposit money banks on the Nigeria
Exchange Group (NGX). Data for the study were analyzed using econometric techniques including
multiple regressions, fixed effects, and random effects. Some diagnostic tests such as normality,
multicollinearity, and heteroskedasticity were conducted to examine the behavior of the data. The
results from the analysis revealed that environmental management systems have a positive and
significant effect on the financial performance of the sampled firms, as measured by return on
asset (ROA). It was also revealed that community development has a negative but insignificant
effect on the financial performance of the sampled firms, as measured by return on asset (ROA).
Based on the findings the study therefore concluded that corporate social responsibility has a
significant effect on the financial performance of listed deposit money banks in Nigeria. Based on
the findings and conclusion drawn above, the study recommends amongst others that Nigerian
banks should continue to implement their corporate social responsibility efforts because they
contribute to long-term sustainability, enhance reputation, and align with stakeholder
expectations.
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