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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

References

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