The Relationship Between Corporate Social Responsibility and Financial Performance of Companies Listed in The Nairobi Securities Exchange

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Date

2015-05

Journal Title

Journal ISSN

Volume Title

Publisher

Daystar University, School of Business and Economics

Abstract

The study sought to determine the relationship between corporate social responsibility and financial performance of companies listed in the Nairobi Securities Exchange. The study used descriptive research design to analyze data for five years. The target population for this study consisted of all the companies listed on the Nairobi Securities Exchanges, while the sample size was 19 listed companies. The researcher used secondary data which was collected from annual reports of companies listed in the NSE obtained from Capital Markets Authority. Data analysis was done using the statistical package for the social science (SPSS) software version 22. The study findings indicated that corporate social responsibility had significant and positive effect on financial performance of listed companies at Nairobi Stock Exchange even though the relationship was weak. The positive effect on CSR could be out of competitive advantage achieved by CSR activities which lead to customer goodwill and loyalty resulting to increased turnover and future financial performance. However, the weak relationship between CSR and financial performance could be as a result of CSR impact affecting future profitability as opposed to current period financial performance. Therefore, the study recommended that listed companies should adopt socially responsible investment approach with the aim of increasing their financial performance and that CSR not be viewed as a voluntary undertaking but a compulsory practice by the firms.

Description

MASTER OF BUSINESS ADMINISTRATION in Finance and Strategic Management

Keywords

corporate social responsibility, financial performance, Securities Exchanges, result of CSR

Citation

Mwende, M. P. (2015). The Relationship Between Corporate Social Responsibility and Financial Performance of Companies Listed in The Nairobi Securities Exchange. Daystar University, School of Business and Economics