EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON FINANCIAL PERFORMANCE OF LISTED OIL AND GAS FIRMS IN NIGERIA

Abstract

This study investigated the effect of Corporate Social Responsibility (CSR) on thefinancial performance of listed oil and gas firms in Nigeria from 2014 to 2023. Specifically, itexamined how funds allocated to human training, health and education; infrastructure anddevelopment; and associations affect the net profit margin of these firms. The population of thestudy comprised nine listed oil and gas firms in Nigeria. Employing an Ex-Post Factor researchdesign, the study used secondary data extracted from audited annual reports of five selected oil andgas companies listed on the Nigerian Exchange Group (NGX). The data were analyzed usingdescriptive statistics and ordinary least squares (OLS) regression with E-Views 11 software. Thefindings are: Funds for human training, health, and education have a positive but non-significanteffect on Net Profit Margin of listed oil and gas firms in Nigeria (β = 0.00000008; p = 0.2027);Funds for infrastructure and development have a positive and significant effect on Net Profit Marginof listed oil and gas firms in Nigeria (β = 0.00000009; p = 0.0001); Funds for associations have apositive but non-significant effect on Net Profit Margin of listed oil and gas firms in Nigeria (β =0.00000002; p = 0.5319).In conclusion, CSR spending alone does not automatically translate intoenhanced profitability; rather, the economic effect of CSR appears to depend on the nature of theinvestment and perhaps the visibility, scale, or strategic alignment of those activities with corebusiness goals. The study recommends that Executive Management should increase fundingallocations to infrastructure and development projects, especially those that serve both communityand operational needs (e.g., roads, energy access, water). These investments should be scaled andstrategically aligned with business operations to enhance both community goodwill andprofitability.