Corporate social resposibility and financial performance of Ghana club 100 members

Abstract

Despite the increasing studies on corporate social responsibility and financial performance among high performing companies, very little interest has focused on Ghanaian firms. This study, therefore, examined the relationship between corporate social responsibility (CSR) and financial performance (FP) of the financial firms among Ghana Club 100. A secondary data were used for the study, and 20 financial firms whose CSR expenditure reports were available were selected. A correlation design was used using a three- year (2013-15) data on return on equity (financial performance) and firm size, and multiple regression analysis conducted. The results indicated that CSR has a positive but non-significant effect on firm's ROE, but firm size showed a significant positive relationship with ROE. However, both firm size and CSR provides a good predictive model of firm financial performance. The study recommends Ghanaian financial firms to engage in CSR activities as doing so may improve their financial performance. A CSR expenditure criterion should also be used in ranking Ghana Club 100 firms, to facilitate the collection of secondary data for future research that can cover all members to address the limitations of this study. Keyword: Corporate Social Responsibility, Return on Equity, Firm Size, Club 100