Interconnecting Profit and Purpose: Corporate Social Responsibility as a Driver of Financial Performance in Nigerian Manufacturing Firms

Abstract

This study investigates the effect of corporate social responsibility (CSR) expenditure on financial performance among quoted Nigerian manufacturing firms. Using panel data from ten firms over the 2013–2022 period, the study employs pooled, fixed-effects, and random-effects regression techniques to examine the relationship between CSR spending and Profit After Tax (PAT), Return on Assets (ROA), and Return on Equity (ROE). The findings reveal a positive but statistically insignificant association between CSR expenditure and financial performance indicators. Qualitative analysis of CSR disclosures suggests that CSR practices are largely philanthropic and weakly integrated into core operational strategy, potentially explaining the limited financial impact. The study further identifies sectoral differences between consumer and industrial goods firms, emphasizing the contextual nature of CSR effectiveness. The results highlight the need for strategically aligned, industry-specific CSR initiatives to enhance financial outcomes.