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 the
financial performance of listed oil and gas firms in Nigeria from 2014 to 2023. Specifically, it
examined how funds allocated to human training, health and education; infrastructure and
development; and associations affect the net profit margin of these firms. The population of the
study comprised nine listed oil and gas firms in Nigeria. Employing an Ex-Post Factor research
design, the study used secondary data extracted from audited annual reports of five selected oil and
gas companies listed on the Nigerian Exchange Group (NGX). The data were analyzed using
descriptive statistics and ordinary least squares (OLS) regression with E-Views 11 software. The
findings are: Funds for human training, health, and education have a positive but non-significant
effect 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 Margin
of listed oil and gas firms in Nigeria (β = 0.00000009; p = 0.0001); Funds for associations have a
positive 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 into
enhanced profitability; rather, the economic effect of CSR appears to depend on the nature of the
investment and perhaps the visibility, scale, or strategic alignment of those activities with core
business goals. The study recommends that Executive Management should increase funding
allocations to infrastructure and development projects, especially those that serve both community
and operational needs (e.g., roads, energy access, water). These investments should be scaled and
strategically aligned with business operations to enhance both community goodwill and
profitability.