IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 4 2025
DOI: 10.56201/jafm.vol.11.no4.2025.pg52.73

---

Profitability, Liquidity and Leverage as Precursors of Social Responsibility Disclosure of Listed Manufacturing Firms in Nigeria

Onyali, Chidiebele Innocent, Ukoh, Maureen Uzoamaka, Obi, Grace Uchechi, Aziekwe, Obianuju Precious

---

Abstract

The study undertook the assessment of firm profitability, liquidity and leverage as precursors of social responsibility disclosure among listed manufacturing firms in Nigeria by employing an ex- post facto research design. Thirteen listed industrial goods manufacturing firms made up the sample size of the study. However, purposive sampling technique was used in selecting a sample size of nine (9) firms. Secondary data used in the study were sourced from the annual reports of the sampled firms in the industrial goods sector from 2014 to 2023. Descriptive summary of the collected data was done using mean, standard deviation, maximum and minimum values. To test the hypotheses, the study utilized multiple regression analysis with Ordinary Least Squares (OLS) to determine how these financial factors influence social responsibility disclosure. The significance of the results was evaluated at a 5% level, adhering to a decision rule that accepts or rejects the null hypotheses based on p-values. It was found that: firm leverage has a significant positive effect on social responsibility disclosure among listed manufacturing firms in Nigeria (? = 0.125111; p-value = 0.0040); firm profitability has a significant positive effect on social responsibility disclosure among listed manufacturing firms in Nigeria (? = 0.807777; p-value = 0.0253); firm liquidity has a positive but non-significant effect on social responsibility disclosure among listed manufacturing firms in Nigeria (? = 0.005175; p-value = 0.5556). Based on the findings, it was concluded among others that managers of highly leveraged firms should prioritize enhancing their social responsibility disclosure in order to help build trust with stakeholders and mitigate risks associated with their financial obligations.

keywords:

Social Responsibility; Social responsibility Initiatives; Financial Attributes; Profitability; Liquidity; Leverage

---

Agarwala, N., Pareek, R., & Sahu, T. N. (2024). Do firm attributes impact CSR participation?
Evidence from a developing economy. International Journal of Emerging Markets,19 (12),
4526-4542. https://doi.org/10.1108/IJOEM-05-2022-0876.
Alade, M. E. & Odugbemi, O. M. (2022). Corporate characteristics and implementation of
integrated reporting framework of listed oil and gas firms in Nigeria. International Review
of Business and Economics, 6 (1), 91-102.
Arshad, H., Khaled, H. & Doaa, A. (2022). Determinants of sustainability reporting decision:
evidence from Pakistan. Journal of Sustainable Finance & Investment. 12(1), 214-237.
Asrori, A., Amal, M. I., & Harjanto, A. P. (2019). Company characteristics on the corporate social
reporting index of corporate social and environmental disclosure in Indonesian public
companies. International Journal of Energy Economics and Policy, 9(5), 481-488.
Belay, H. A., Hailu, F. K., & Sinshaw, G. T. (2023). Linking internal stakeholders’ pressure and
Corporate Social Responsibility (CSR) practices: The moderating role of organizational
culture. Cogent Business & Management, 10(2), 2229099.
Boshnak, H. A. (2022). Determinants of corporate social and environmental voluntary disclosure
in Saudi listed firms. Journal of Financial Reporting and Accounting, 20(3/4), 667-692.
Carmo, C. & Miguéis, M. (2022). Voluntary sustainability disclosures in non-listed companies:
An exploratory study on motives and practices. Sustainability, 14(12), 7365-7387.
Crossley, R. M., Elmagrhi, M. H., & Ntim, C. G. (2021). Sustainability and legitimacy theory: The
case of sustainable social and environmental practices of small and medium?sized
enterprises. Business Strategy and the Environment, 30 (8), 3740-3762.
Ghezal, R. (2024). Determinants of engagement with and of stakeholders in CSR decision-
making: A stakeholder perspective", European Business Review, 36 (5), 771-790.
https://doi.org/10.1108/EBR-03-2023-0085.
Hassan, A., Elamer, A. A., Fletcher, M., & Sobhan, N. (2020). Voluntary assurance of
sustainability reporting: evidence from an emerging economy. Accounting Research
Journal, 33(2), 391-410.
Husna, A., & Satria, I. (2019). Effects of return on asset, debt to asset ratio, current ratio, firm size,
and dividend payout ratio on firm value. International Journal of Economics and Financial
Issues, 9(5), 50-54.
Islamiati, W., & Suryandari, D. (2021). The impact of firm size, leverage and liquidity on
sustainability report disclosure with profitability as moderating variable. Jurnal Akuntansi
Bisnis, 18(2), 197-215.
Jeroh, E. (2020). Firms attributes, corporate social responsibility disclosure and the financial
performance of listed companies in Nigeria. Asian Economic and Financial Review, 10(6),
727-740.
Juusola, K., & Srouji, R. (2023). Challenges associated with sustainability accounting and
reporting practices: a legitimacy perspective. International Journal of Law and
Management, 65(1), 64-87.
Kumo, U. A. (2023). Corporate governance attributes and firm-specific features as determinants
of sustainability initiatives of listed financial and non-financial companies in Nigeria.
Advances, Preprints, DOI:10.31124/advance.22722154.v1.
Lambe, I., Arumona, O. J., & Okoli, T. (2023). Firm performance attributes and social
sustainability reporting: A case of listed non-financial companies in Nigeria. International
Journal of Business Management and Economic Review, 6(2), 1-21.
Mahadeo, J. D., Oogarah-Hanuman, V., & Soobaroyen, T. (2011). Changes in social and
environmental reporting practices in an emerging economy (2004–2007): Exploring the
relevance of stakeholder and legitimacy theories. In Accounting forum, 35(3), 158-175
Nguyen, T. H., Vu, Q. T., Nguyen, D. M., & Le, H. L. (2021). Factors influencing corporate social
responsibility disclosure and its impact on financial performance: The case of
Vietnam. Sustainability, 13(15), 8197.
Nnubia, I. C., Anaike, C. L., & Onyeka, C. M. (2024). Firm’s attributes and corporate social
responsibility disclosure: An empirical analysis of listed manufacturing companies in
Nigeria. Journal of Global Interdependence and Economic Sustainability, 3(2), 1-17.
Nzereogu, C. E., & Onyali, C. I. (2023). Firm Financial Characteristics and Social Responsibility
Cost of Industrial Goods Firms Publicly Listed in Nigeria. Journal of Global
Accounting, 9(1), 76-107.
Oburota, M. P., & Ebiaghan, O. F. (2023). Firm specific drivers of corporate social responsibility
(CSR) disclosure among oil and multinationals in Nigeria. International Journal of
Management & Entrepreneurship Research, 5(7), 531-541.
Okerekeoti, C.U. (2022). Effect of profitability on sustainability reporting of listed oil and gas
firms in Nigeria. Research Journal of Management Practice. 2(4), 1-12.
Omah, P. C. (2024). An empirical investigation of the association between firms characteristics
and corporate social disclosures in the Nigerian financial sector. BW Academic Journal,
Retrieved from https://bwjournal.org/index.php/bsjournal/article/view/1672
Owolabi, G. F. (2022). Determinants of corporate sustainability reporting of listed industrial and
domestic goods companies in Nigeria (Doctoral dissertation, Kwara State University,
Nigeria).https://search.proquest.com/openview/32f979692554ce665d32d94d1ca39ee4/1?
pq-origsite=gscholar&cbl=2026366&diss
Ramadhani, C. F., & Agustina, L. (2019). Influence of company characteristics on corporate social
responsibility
disclosures
in
the
annual
reports
of
the
manufacturing
companies. Accounting Analysis Journal, 8(1), 24-30.
Ruhana, A., & Hidayah, N. (2020). The Effect of Liquidity, Firm Size, and Corporate Governance
Toward Sustainability Report Disclosures (Survey on: Indonesia Sustainability Report
Award Participant). In 4th International Conference on Management, Economics and
Business (ICMEB 2019) (pp. 279-284). Atlantis Press.
Salehi, M., Tarighi, H., & Rezanezhad, M. (2019). Empirical study on the effective factors of
social responsibility disclosure of Iranian companies. Journal of Asian Business and
Economic Studies, 26(1), 34-55.
Stancheva-Todorova, E. P. (2023, February). Recent and Future Trends In Sustainability
Reporting. In ???????????? ?????? ???????????" ????? ????–????? ? ?????
???????" 10-11 ??? 2022 (pp. 82-93). ???????? ???????? ???????????.
Sürdü, F. B., & Çal??kan, A. Ö. (2020). Determinants of corporate social responsibility disclosure
by Turkish insurance companies. Ça? Üniversitesi Sosyal Bilimler Dergisi, 17(1), 53-64.
Thomas, G. N., Aryusmar, A., & Indriaty, L. (2020). The effect of company size, profitability, and
leverage on sustainability report disclosure. Journal of Talent Development &
Excellence, 12(1), 4700-4706.
Thomas, T. E., & Lamm, E. (2012). Legitimacy and organizational sustainability. Journal of
Business Ethics, 110, 191-203.
Wijesundara, C. N. R., Khatibi, A., Azam, S. F., & Tham, J. (2024). A critique on theoritical
framework for adoption of corporate sustainability practices: Integrating institutional
motives, stakeholder motives and managerial motives. International Journal of
Professional Business Review, 9(1), e04202-e04202.
Wu, K. (2023). Burden of leverage: How leverage affects performance of companies in
America. International Journal of Trade, Economics and Finance, 14(3), 25-50.
Yekini, K. C., Adelopo, I., & Adegbite, E. (2017). The impact of community expectations on
corporate community involvement disclosures in the UK. In Accounting Forum, 41(3),
234-252.

DOWNLOAD PDF

---

Back