International Journal of Management Studies and Social Science Research
143
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CORPORATE SOCIAL RESPONSIBILITY (CSR) DISCLOSURE AND FINANCIAL
PERFORMANCEOF LISTED MANUFACTURING FIRMS IN NIGERIA: A HOLISTIC
APPROACH
OKERE, Wisdom; UDEKA, Philip; RUFAI Oluwatobi
Department of Economics, Accounting and Finance,
Bells University of Technology
Sango-Ota, Ogun State.
IJMSSSR 2022
VOLUME 4
ISSUE 2 MARCH - APRIL ISSN: 2582 - 0265
Abstract: The study examined the relationship between Environmental accounting information disclosureand
Financial Performance of Listed Manufacturing Firms in Nigeria. The study uses secondary data extracted from
the annual reports of the listed manufacturing companies for the period of 2009-2018. The study used a holistic
checklist which was prepared by determining certain CSR activities which include Donations, Employee Benefits,
Staff Training Costs and Research and Development Costs. Panel ordinary least square regression was used to
estimate the model in order to achieve the research objective. The study found that environmental accounting
information disclosurehas a negative impact on financial performance of manufacturing firms in Nigeria. In line
with the findings of the study, it is recommended that CSR practice should continue to be done by entities as
voluntary for profit driven manufacturing firms so it would not have a negative impact on their financial
performance.
Keywords: Environmental Accounting, Corporate Social Responsibility, Performance, Profitability, Environment
Cost.
1.0 Introduction
Corporate social responsibility disclosure is an essential concept that is progressively being deliberated and
adopted internationally. Scholars and experts have been striving to set up a definite idea of corporate social
responsibility for more than 30 years and what should be disclosed in line with expectations of stakeholders. Early
research by scholars deliberated on whether CSR should be in existence or not (Shimshack & Kitzmueller, 2010).
Following the poor performance of the manufacturing sector in 2016, analysts and researchers are looking beyond
the poor statistics to map out the way forward for this sector this is caused by series of challenges such as scarcity
of foreign exchange, high interest rate and poor governance strategies by the management of manufacturing firms.
Consequently, this has led to the shutdown of about 272 firms reduced capacity utilization, reduced production
and cut down in workers remuneration (CBN Statistics, 2017). The economic recession experienced in 2016 as
well as other inherent factors affecting the Nigerian economy has greatly limited the financial performance of the
manufacturing firms. This creates a need to examine factors that influences the financial performance of
manufacturing forms in Nigeria.
Mcguire and Schneeweis (1988) set that firms invest in reputation through their active involvement in CSR.
Numerous corporations such as banks and manufacturing firms in Nigeria are driven by the need to make profit
and that is the sole point of each business. Ponnu and Okoth (2009) provided evidence which proved that firms
engaging in CSR seek to improve their corporate image or status which can enable them improve their profits and
revenue. Carroll and Shabana (2011) posited that CSR should be adopted so as, to obtain a reputable capital and
maintain legitimacy and a good name within the society. Manufacturing firms in Nigeria are relied upon to deal
with the effects of their operations on by adopting corporate social responsibility.
Regardless of the immense consideration as of late given to environmental accounting information disclosure in
Nigeria, an area of concern still remains firms in the manufacturing sector. Researchers were not able to determine
why most manufacturing firms still do not fully adopt the corporate social responsibility strategy. Also, there has