CORPORATE SOCIAL, ECONOMIC AND ENVIRONMENTAL RESPONSIBILITY ACTIVITIES AND THE EFFECT ON AGROBASED FIRMS’ PERFORMANCE IN NIGERIA

Impact of corporate social responsibility on firm performance has largely been examined in other sectors including banking, and manufacturing. There is however scanty evidence of CSR on the performance of agro-based firms in Nigeria. This study examined the effect of CSR on the performance of agricultural firms in Nigeria. The study focused on accounting and market performance measures. The study sampled 37 quoted firms out of a universe of 180 listed firms on Nigerian Stock Exchange (NSE) with focus on the cluster of quoted agricultural firms' Global Reporting Initiative (GRI) and Korean Economic Justice Institute (KEJI) CSR rating calculation method as a measure of CSR for the years between 1996 and 2017. We measured performance through three performance index namely return on asset (ROA), return on equity (ROE) and Tobin's Q for robustness. We found evidence consistent with several prior researches that CSR of agricultural firms enhances their financial performance. As agricultural firms' CSR activities increase, their firms' value increases, this by implication advances shareholders' value in terms of Tobin's Q. Both ROE and ROA increased, which means that managerial efficiency in terms of asset utilization increases with efficient CSR activities. Thus, CSR is a key instrument of increasing the performance of agricultural firms and the shareholders' values. This effect is applicable as agricultural firms grow their assets. Firms' size correlates positively with financial return, which suggests that firms that pursue growth in terms of gross assets could maximize the return associated with CSR activities. Our conclusion is that higher involvement in CSR could enhance agricultural firms' value.