• Home||
  • THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY IN NIGERIAN OIL AND GAS FIRMS: AN EMPIRICAL STUDY

THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON PROFITABILITY IN NIGERIAN OIL AND GAS FIRMS: AN EMPIRICAL STUDY

  • Post by:
  • December 4, 2025
  • Comments off

Ojeh Augustine PhD 1 Geoffrey Ndubuisi Udefi PhD 2 Festus Ndubuisi Nkwo 3 & Ezema, Kenneth Okwudili PhD 4

Abstract         

This study examines the effect of corporate social responsibility (CSR) expenditures on the financial performance of Nigerian oil and gas firms between 2014 and 2024, with Return on Assets (ROA) as the measure of profitability. The specific objective was to assess how Environmental Responsibility Expenditure, Community Development Expenditure, Employee Welfare Expenditure, Product Responsibility Expenditure, and Philanthropic Donations influence ROA. Using panel data from five Nigerian oil and gas firms and applying panel least squares regression analysis, the study found mixed effects of CSR expenditures on ROA. Environmental Responsibility Expenditure (β = -6.28E-05, p = 0.0000) showed a statistically significant negative effect, while Community Development Expenditure (β = 8.41E-05, p = 0.0334), Employee Welfare Expenditure (β = 0.000153, p = 0.0000), and Philanthropic Donations (β = 0.000124, p = 0.0003) had statistically significant positive effects on ROA. Product Responsibility Expenditure (β = 3.70E-05, p = 0.2038) exhibited an insignificant relationship with ROA. These findings suggest that different components of CSR expenditures impact firm profitability in varying ways. The results highlight the importance of strategic CSR investment aligned with both social and financial goals to enhance firm performance. The study concludes that while CSR is essential for sustainable business practices, its financial implications depend on the specific nature of the expenditure. Firms are encouraged to adopt balanced CSR strategies that support community development, employee welfare, and philanthropy to improve profitability in the Nigerian oil and gas sector.

Keywords:  Return on Assets (ROA), Corporate Social Responsibility (CSR), Environmental Responsibility, Community Development, Employee Welfare, Product Responsibility, Philanthropic Donations, Nigerian Oil and Gas Firms, Financial Performance.

Cite: Ojeh, O., Udefi, G. N., Nkwo, F.N. & Ezema, K. O. (2025). The effect of Corporate Social Responsibility on Profitability in Nigerian Oil and Gas Firms: An empirical study. International Journal of Management Foresight and Strategy,4 (1), 21-38.

IJMFS_41,21-38Download
Categories: