The influence of corporate social responsibility on financial performance: Evidence from listed firms
Chris Antorine, Robert Oguti Etengu 
, Bosco Opio
Abstract
This paper examines the impact of corporate social responsibility (CSR) disclosure choices on firms’ financial performance in a non-mandatory environment. The authors employed an ex-post facto research design using cross-sectional and time series data. The data were collected over a seven-year period (2016–2022) from firms listed on the Uganda Securities Exchange (USE). The analysis was conducted in the form of descriptive statistics, correlations, and regressions using STATA 14. The independent variable is the CSR score, and the dependent variable is the firm’s financial performance. Based on the panel data model, it was found that governance disclosure (GOV) and environmental disclosure (ENV) have no significant impact on the firm’s financial performance. On the other hand, the regression results based on social disclosure (SOC) indicate either a statistically significant negative impact or no impact at all on the financial performance. The stakeholder theory’s assertion that satisfying the needs of all stakeholders inevitably leads to a firm’s financial success is largely refuted by the data presented in this article. The authors recommend that listed firms conduct a thorough assessment of their social initiatives, especially those that affect financial performance, to help allocate resources more efficiently. Moreover, it is critical for listed firms to support their environmental initiatives for ethical and sustainable reasons.
Keywords: Corporate Social Responsibility, Financial Performance, Listed Firms, Uganda Securities Exchange
Authors’ individual contribution: Conceptualization — C.A.; Methodology — R.O.E. and B.O.; Formal Analysis — B.O.; Investigation — C.A. and R.O.E; Resources — C.A., R.O.E., and B.O.; Writing — Original Draft — B.O.; Writing — Review & Editing — C.A. and R.O.E.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: M14, M41
Received: 12.08.2024
Accepted: 02.01.2025
Published online: 08.01.2025
How to cite this paper: Antorine, C., Etengu, R. O., & Opio, B. (2024). The influence of corporate social responsibility on financial performance: Evidence from listed firms. Business Performance Review, 2(2), 48–57. https://doi.org/10.22495/bprv2i2p4
Amount: 14 EUR
