Corporate social responsibility and financial performance nexus: Empirical evidence from Ghana

Musah Mohammed Saeed, Mahalakshmi Mudliar and Manisha Kumari

Corporate Social Responsibility and Environmental Management, 2023, vol. 30, issue 6, 2799-2815

Abstract: This paper investigates the relationship between corporate social responsibility and the financial performance of Ghana's publicly listed financial institutions. Twelve listed financial institutions on the Ghana Stock Exchange (GSE) provided secondary data during a 10‐year period (2010–2019). The data were examined using descriptive statistics, correlation matrix, rotated factors, factor score efficiency, and regression results. Corporate social responsibility (CSR) has a favourable effect on profitability and stock returns, according to the data. This demonstrate that while CSR enhances businesses' capacity for financial success, it should not be viewed as an optional activity but rather be included in long‐term business strategies. The study recommends management of financial institutions to ensure CSR activities are formally inbuilt into their policy statements and backed with an effective budget. The study further recommends more publicity be given to CSR programs undertaken by financial institutions to assist them get the needed potential benefits in enhancing their ROE and ROA. This study serves as a guide for policymakers and reference for future research on the effect of CSR on company performance in Sub‐Saharan Africa.

Date: 2023
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https://doi.org/10.1002/csr.2516

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:30:y:2023:i:6:p:2799-2815

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