The Impact of Corporate Social Responsibility on Firm’s Financial Performance: The Tanzanian Perspective

Isanzu, Juliana S. (2013) The Impact of Corporate Social Responsibility on Firm’s Financial Performance: The Tanzanian Perspective. Masters thesis, The Open University of Tanzania.

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Abstract

There has been a significant growth of interest in the field of corporate social responsibility and the debate on the Impact of Corporate Social Responsibility on Firm Financial Performance is still hot. There are however very few studies done in the least developed countries on the subject matter. The main objective of the study was to investigate the impact of CSR on Firm Financial Performance in the least developed countries, Tanzania being the country in question. The aim of this paper is to find out if there is a significant difference in financial performance of firms that engage in CSR relative to those that do not practice CSR. The data set included randomly selected 100 firms operating in Tanzania using accounting based measures of financial performance namely Return on Asset, Return on Equity and Return on Sales. The hypotheses were tested using t-test assuming equal variance. The study revealed that there is a significance difference in financial performance favoring those firms that do Corporate Social Responsibility, supporting the views that CSR has a positive influence on firm financial performance. Firms should then engage in corporate social responsibility so as to improve their financial performance and managers should not underestimate the contribution it makes by committing their time and resources to make sure their programs are effective in order to achieve the competitive advantage.

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