IDEAS home Printed from https://ideas.repec.org/a/ibn/ibrjnl/v11y2018i12p67-77.html
   My bibliography  Save this article

Nigerian 3C-Index Rating of Corporate Social Responsibility and the Profitability of Some Companies Listed on the Nigerian Stock Exchange

Author

Listed:
  • Jocelyn U. Upaa
  • Robinson O. Ugwoke
  • Vivian O. Ugwoke

Abstract

This study sought to ascertain the link between Corporate Social Responsibility (CSR) rating and the profitability of companies listed on the Nigerian Stock Exchange (NSE), following the release of the first ever country rating of Corporate Citizenship Index (3C-Index) in 2013. The study further sought to ascertain whether significant differences exist between the performances of companies that received high CSR ratings as compared to those that received low ratings. Secondary data were extracted from the 2013 to 2017 annual reports and accounts of companies that got different CSR ratings classified as high and low. The multiple regression and Mann-Whitney rank test (U-test) were used to test the propositions. The findings from the regression showed a positive but insignificant relationship between CSR rating and firm performance but a significantly positive relationship with the size of firms. The results of the U-tests were mixed, whereas the Return on Assets (ROA) of companies with high CSR ratings did not differ significantly from companies with low CSR ratings, the Return on Equity (ROE) of companies with high CSR ratings was significantly greater than that of companies with low CSR ratings. This finding suggests that CSR may be in its infancy among the study sample but is beginning to take roots as evident by the positive βs statistics and a significant difference in the ROE of the companies as captured by the non-parametric statistics. It is recommended that the period of the study be extended in the intermediate and long-run to determine if the relationship might become significant.

Suggested Citation

  • Jocelyn U. Upaa & Robinson O. Ugwoke & Vivian O. Ugwoke, 2018. "Nigerian 3C-Index Rating of Corporate Social Responsibility and the Profitability of Some Companies Listed on the Nigerian Stock Exchange," International Business Research, Canadian Center of Science and Education, vol. 11(12), pages 67-77, December.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:12:p:67-77
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ibr/article/download/0/0/37557/38121
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ibr/article/view/0/37557
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Prakash J. Singh & Kannan Sethuraman & Jocelin Y. Lam, 2017. "Impact of Corporate Social Responsibility Dimensions on Firm Value: Some Evidence from Hong Kong and China," Sustainability, MDPI, vol. 9(9), pages 1-24, August.
    2. Moses Pava, 2008. "Why Corporations Should Not Abandon Social Responsibility," Journal of Business Ethics, Springer, vol. 83(4), pages 805-812, December.
    3. Philip Baird & Pinar Geylani & Jeffrey Roberts, 2012. "Corporate Social and Financial Performance Re-Examined: Industry Effects in a Linear Mixed Model Analysis," Journal of Business Ethics, Springer, vol. 109(3), pages 367-388, September.
    4. Lutz Bornmann, 2013. "How to analyze percentile citation impact data meaningfully in bibliometrics: The statistical analysis of distributions, percentile rank classes, and top-cited papers," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 64(3), pages 587-595, March.
    5. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    6. Doaa Aly & Jon Simon & Khaled Hussainey, 2010. "Determinants of corporate internet reporting: evidence from Egypt," Managerial Auditing Journal, Emerald Group Publishing, vol. 25(2), pages 182-202, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, WeiWei & Padmanabhan, Prasad & Huang, Chia-Hsing, 2024. "ESG and debt structure: Is the nature of this relationship nonlinear?," International Review of Financial Analysis, Elsevier, vol. 91(C).
    2. Noordewier, Thomas G. & Lucas, Marilyn T., 2020. "On being green and profitable: Does industry context matter?," International Journal of Production Economics, Elsevier, vol. 223(C).
    3. Daeheon Choi & Paul Moon Sub Choi & Joung Hwa Choi & Chune Young Chung, 2020. "Corporate Governance and Corporate Social Responsibility: Evidence from the Role of the Largest Institutional Blockholders in the Korean Market," Sustainability, MDPI, vol. 12(4), pages 1-15, February.
    4. Lin Zhang & Yuehua Xu & Honghui Chen, 2022. "Do Returnee Executives Value Corporate Philanthropy? Evidence from China," Journal of Business Ethics, Springer, vol. 179(2), pages 411-430, August.
    5. Ahmed Marhfor & Kais Bouslah & Abdelmajid Hmaittane, 2022. "Does Firm Political Risk Affect the Relationship between Corporate Social Responsibility and Firm Value?," Sustainability, MDPI, vol. 14(18), pages 1-23, September.
    6. Matteo Pozzoli & Marcello Raffaele, 2022. "Non-financial information and company market value," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2022(2 Suppl.), pages 167-187.
    7. Eline Auwera & Bert D’Espallier & Roy Mersland, 2024. "Achieving Double Bottom-Line Performance in Hybrid Organisations: A Machine-Learning Approach," Journal of Business Ethics, Springer, vol. 190(3), pages 625-647, March.
    8. Boonlert Jitmaneeroj, 2024. "Value relevance of multifaceted corporate social performance: how do country-specific factors matter?," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-20, December.
    9. Gérard Hirigoyen & Thierry Poulain-Rehm, 2015. "Relationships between Corporate Social Responsibility and Financial Performance: What is the Causality?," Post-Print hal-01382072, HAL.
    10. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    11. Milind Kumar Jha & K. Rangarajan, 2020. "Analysis of corporate sustainability performance and corporate financial performance causal linkage in the Indian context," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 5(1), pages 1-30, December.
    12. Chen Ma & Latif Yasir, 2023. "Carrot or Stick? CSR and Firm Financial Performance," Journal of Business Ethics, Springer, vol. 188(2), pages 349-365, November.
    13. José M. Brotons & Manuel E. Sansalvador, 2020. "The relation between corporate social responsibility certification and financial performance: An empirical study in Spain," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1465-1477, May.
    14. Wafa Sahraoui & Rimvie Enoc Kabore, 2021. "The relationship between Corporate Social Responsibility and performance: the moderating effect of financial leverage," Working Papers hal-03503462, HAL.
    15. Namig MIRZAYEV, 2021. "The Environmental Aspect Of Corporate Soci̇al Responsibility: Document Analysis Of Socar," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 26, pages 109-113, September.
    16. Milind Kumar Jha & K. Rangarajan, 2020. "The approach of Indian corporates towards sustainable development: An exploration using sustainable development goals based model," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(5), pages 1019-1032, September.
    17. Juan Diego Alzate-G mez & Di genes Lagos Cort s & Percy Marquina Fieldman, 2020. "Corporate Social Responsibility Practices and Economic Performance in Colombia: The Moderating Effect of Family Control," International Journal of Economics and Financial Issues, Econjournals, vol. 10(1), pages 6-18.
    18. Remo-Diez, Nieves & Mendaña-Cuervo, Cristina & Arenas-Parra, Mar, 2023. "Exploring the asymmetric impact of sustainability reporting on financial performance in the utilities sector: A longitudinal comparative analysis," Utilities Policy, Elsevier, vol. 84(C).
    19. Sohail Ahmad Javeed & Lin Lefen, 2019. "An Analysis of Corporate Social Responsibility and Firm Performance with Moderating Effects of CEO Power and Ownership Structure: A Case Study of the Manufacturing Sector of Pakistan," Sustainability, MDPI, vol. 11(1), pages 1-25, January.
    20. Jintae Kim & Kangho Cho & Cheong K. Park, 2019. "Does CSR Assurance Affect the Relationship between CSR Performance and Financial Performance?," Sustainability, MDPI, vol. 11(20), pages 1-12, October.

    More about this item

    Keywords

    corporate social responsibility; corporate citizen index; financial performance; Nigerian stock exchange;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:12:p:67-77. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.