Jornal de Negócios e Assuntos Financeiros

Corporate Social Responsibility and Financial Performance in Quoted Oil and Gas Industry

Abstract

Akinyede Oyinlola Morounfoluwa*, Ojedele Mofoluwaso Iyabode and Ayodele Thomas Duro

The paper investigated the direction of causality between CSR and financial performance of the quoted oil and gas industry. The data set contains 10 years from 2014 to 2018 of firm specification variables. Data were gathered from audited financial reports of 8 purposively selected firms from quoted companies in the Oil and Gas industry, Nigeria Stock Exchange (NSE) Factbook and statistical Bulletin of the Central Bank of Nigeria. Granger causality test model was employed to investigate the direction of causality between Corporate Social Responsibility and Financial Performance. The result indicated that there was no causal relationship between corporate social responsibility and Return on Assets (χ2 =3.479, p>0.05). Return on Asset does not granger cause corporate social responsibility (χ2 =2.279, p>0.05). Also, corporate social responsibility does not granger cause Return on Asset. The study concluded that significant feedback did not exist in any direction of causality between corporate social responsibility and profitability, though there exists a positive relationship between them.