Corporate Social Responsibility and Stock Returns of Quoted Industrial Firms in Nigeria
Abstract
This study examined the effect of corporate social responsibility (CSR) and stock returns of firms in the Nigerian industrial sector. Specifically, the study specifically measured CSR activities into philanthropic responsibility, ethical responsibility, legal responsibility, and economic responsibility while stock returns is measured by the annual stock returns of the sampled firms. The study adopted the panel regression technique since the variables exhibited both time series and cross-sectional data characteristics. The expost facto research design was adopted since the study variables have existed in retrospect. The study covers a period of ten years spanning from 2013 to 2022 over ten (10) quoted firms in the Nigerian industrial sector as at 31st December, 2022. Also, the two control variables used in this study are financial leverage and firm size. The study confirmed that, philanthropic responsibility, ethical responsibility, legal responsibility has positive significant effect on stock returns of quoted firms in the Nigerian industrial goods sector. However, economic responsibility exerted positive insignificant effect on stock returns of quoted firms in the Nigerian industrial goods sector. Hence, the study concludes that, corporate social responsibility is a major driver of the sampled firms’ stock returns. As such, management of the sampled firms should place more emphasis on philanthropic responsibility considering it high roles it plays in improving the sampled firms’ stock returns. Also, management of the sampled firms should ensure that, they adhere to ethical best practices while investing in CSR activities.
Keywords
Corporate Social ResponsibilityStock ReturnsQuoted Industrial Firmspanel
References
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