Influence of Corporate Social Responsibility Disclosure on Financial Performance of Companies Listed on the Nairobi Securities Exchange in Kenya.

King’wara, Robert Adawo (2020) Influence of Corporate Social Responsibility Disclosure on Financial Performance of Companies Listed on the Nairobi Securities Exchange in Kenya. ["eprint_fieldopt_thesis_type_phd" not defined] thesis, The Open University of Tanzania.

PDF - Submitted Version Download (7MB)

Abstract

The overall purpose of this study was to examine the influence of Corporate Social Responsibility Disclosure (CSRD) on financial performance of companies listed on the Nairobi Securities Exchange. Specific objectives were to investigate the effect of CSRD dimensions of employees, community, environment, education and health on financial performance. CSRD information was collected from annual reports for the period 2007–2015 using quantitative content analysis. Financial performance data (return on assets, return on equity and Tobin’s Q) was collected for the period 2008–2016, a one-year lag behind the CSRD data. Control variables were firm size, industry type and leverage. Panel data regression was used for analysis. Overall CSRD was found to have no statistically significant impact on financial performance. Similarly, the dimensions of employees’, community, education and health of CSRD were not statistically significant in explaining the variation of financial performance. The environmental dimension of the CSRD was found to be statistically significantly positively related to the firms’ ROA but not statistically significant with ROE and TBQ. Since neutrality of the relationship is empirically proven, the conclusion is that CSRD has little or no contribution to financial performance and the implication is that effective financial reporting for companies listed on the NSE does not include reporting on CSR activities. Theoretically the study proposes that unequal controlling strengths of different stakeholders be assumed under the stakeholder theory for application within different national contexts in order for managers to be able to make the necessary tradeoffs among competing stakeholders. Keywords: Corporate social responsibility; Disclosure; Financial performance; Panel data; Kenya

Actions (login required)

View Item