1.1 BACKGROUND OF THE STUDY
Organizations recently are confronting expanding pressures from their stakeholders to address and disclose social and environmental obligations. The significance of corporate social responsibility as a vital tool for the societal progressiveness cannot be over emphasized. This can be seen from the points of view of showing concern for the welfare of the community in order to achieve peace, competent and cheaper manpower, a platform for a better community, by making the host community worthy of livelihood in terms of infrastructural development, and by boosting their image, reducing advert cost, gaining an edge over competitors, and making the organization‟s name as an household name in the society. Corporate enterprises are held accountable for safeguarding a workable environment as their activities create pressure over the environment (Uwuigbe and Egbide, 2012). Recent concerns about global warming, emissions, trading market for greenhouse gases have intensified stakeholder’s interest in corporate social responsibility performance (Anderson, 2012). Against this backdrop, Corporate social responsibility (CSR) is at present an important discourse between companies and their stakeholders as the concept now rank among top agenda of most corporations (Bhattacharya et al., 2008). The concept of CSR is concerned with the commitment of companies to contribute to sustainable development, stakeholder’s interest, and enhancement of social conditions. Corporate Social Responsibility (CSR) is a type of internal observing, management and outside correspondence, which enables organizations of all sizes to meet the developing data needs of internal and external stakeholders (Aggarwal, 2013). Stakeholders (speculators, government, workers, clients, providers, exchange affiliations and environmental gatherings) are anticipating that organizations should create reports that will exhibit financial esteem, drive development and advance learning. Long haul business achievement depends on a solid financial position, as well as on energetic social and environmental performance (Albassam, 2014). Deposit money bank transacts the business of banking, that is, accepting deposit for the purpose of lending for investment to the public, payable on demand or otherwise withdrawable by cheque, draft or otherwise. The prevailing components of CSR require organizations to look into the interest of society and take responsibility for the impact of their doings with customers, employees, shareholders, communities and the environment in all facets of their operations (Rhuks et al., 2010). CSR is not just a statutory responsibility to conform with legal prerequisite; rather, it entails requirement compelling organizations to voluntarily take extra strides in advancing the quality of life for employees and their defendants, old communities and the society at large. These are achievable through educational training, provision of basic infrastructure, health care services provisions, skill acquisitions programmes and so on. A core or common denominator within CSR issues is that it addresses the relationship between (businesses) corporations and societies. Financial institutions, in particular banks, have come under increasing pressure to take a more long term view of their investors‟ business interests and to acknowledge and respond to their obligations to the society (Matten, 2013; Money and Schepers, 2007; Gill, 2008).The performance of deposit money banks is influenced by their strategies and operations. Subsequently, there is a level headed discussion on the degree to which organization management ought to think about social and environmental factors in making decisions. Corporate social responsibility is an urgent advance towards accomplishing a reasonable worldwide economy. It upgrades corporate accountability, assembles trust, makes transparency, drives more noteworthy advancement, enhances internal management and decision-making processes, diminishes compliance costs and gives competitive advantage. The connection between a company's social responsibility (CSR) or its corporate social responsiveness and its financial performance has been the subject of debate since the 1960s. The origin of corporate social responsibility can be found in Friedman's (2009) well known article titled: “The social responsibility of business is to expand its profits”. Corporate social responsibility these days has considerably more extensive degree than it used to be, it adds environmental and social problems to economic goals (Ioannou & SeraFeim, 2010). It is hard to accept in any case, that organizations have just minor financial interests to put resources into such intermediaries (McWilliams, Siegel & Wright, 2013). Business organizations especially in the banking sector have been one of the major concerns for management experts, investors and researchers. There is an overwhelming increase in research findings on the relationship between CSR and performance which are varied with some studies showing relationship as positive (Akindele, 2011; Mordi, 2012; Margolis & Walsh, 2013), some, negative (Barnea & Rubin, 2016) and others, an absence of relationship (McWilliams & Siegel, 2010; Fauzi, 2009; Orlitzky, Schmidt & Rynes, 2013). The inconclusive stance as derived from the literature has been attributed to diverse methodologies adopted by researches with inherent deficiencies. Van (2013), identifies these as inappropriateness of measures for CSR and financial performance or the incorrect matching of measurements, model misspecifications omitting control variables that are deemed important determinants of firm performance and the non-robustness of estimations that can hamper validity of data sets and results. Taking into cognizance the significant levels of debate on and practice of CSR and the issues , there is the need for studies incorporating and adjusting for these in order for more conclusive propositions on the relationship between CSR and performance to be established. With respect to Nigeria where CSR is still discharged at the discretion of businesses, findings could be used as a basis for formulating policy that will increase the performance of banks in the course of providing corporate social responsibility services to their operating community. It could likewise add insight to the issues of whether CSR should be more than a voluntary practice. In light of the above, investigating the relationship between CSR and performance of deposit money banks in Nigeria may consequently provide logical explanations as to why some of these banks behave in a more socially responsible way than others based on how such behaviours are found to affect their performance. Therefore the study examines the effect of corporate social responsibility on performance of deposit money banks in Nigeria
1.2 STATEMENT OF PROBLEM
Keith (2014) asserted that business does not exist in isolation in our society and that a healthy business system cannot exist within a sick society. Also business usually benefits from a stable and well managed social and political environment. Any social unrest caused by prejudice and poverty is harmful to business. It is therefore imperative on corporate body to consider their acts within the framework of the whole social system. Thus, most corporate citizen doesn’t believe to be socially responsible, For over three decades, the study of the correlation between CSR performance and corporate financial performance has yielded contradictory results (Marom 2013). Empirical studies of the relationship between CSR and financial performance comprise essentially two types. The first uses the event study methodology to assess the short-run financial impact (abnormal returns) when firms engage in either socially responsible or irresponsible acts. The results of these studies have been mixed. Posnikoff (2009) cited in Tsoutsoura (2015) reported a positive relationship, whereas Welch and Wazzan (2013 cited in Tsoutsoura (2015)) found no relationship between CSR and financial performance. Other studies, discussed in McWilliams and Siegel (2012) are similarly inconsistent concerning the relationship between CSR and short-run financial returns. The second type of study examines the relationship between measure of corporate social performance (CSP) and measures of long-term financial performance, by using accounting or financial measures of profitability. The studies have also produced mixed results. Cochran and Wood (2013) for example, located a positive correlation between social responsibility and accounting performance after controlling for the age of assets. Thus, all the previous studies used aggregated measure of CSR base on the literature reviewed. This study tends to focus on the economic drivers of corporate social responsibility (CSR), dimensions of corporate social responsibility. This study examines the effect of corporate social responsibility on performance of deposit money banks in Nigeria.
1.2 AIMS OF THE STUDY
The major aim of the study is to examine the effect of corporate social responsibility on performance of deposit money banks in Nigeria. Other specific objectives of the study include;
1. To examine corporate social responsibility and performance of deposit money banks in Nigeria
2. To examine the economic drivers of corporate social responsibility (CSR) of deposit money banks in Nigeria.
3. To examine the relationship between corporate social responsibility andnet profit margin of deposit money banks in Nigeria.
4. To examine the effect of corporate social responsibility on performance of deposit money banks in Nigeria.
5. To examine the dimensions of corporate social responsibility of deposit money banks in Nigeria.
6. To examine the relationship between corporate social responsibility and performance of deposit money banks in Nigeria.
1.4 RESEARCH QUESTIONS
1. What is the corporate social responsibility and performance of deposit money banks in Nigeria?
2. What are the economic drivers of corporate social responsibility (CSR) of deposit money banks in Nigeria?
3. What is the relationship betweencorporate social responsibility andnet profit marginof deposit money banks in Nigeria?
4. What is the effect of corporate social responsibility on performance of deposit money banks in Nigeria?
5. What are the dimensions of corporate social responsibility of deposit money banks in Nigeria?
6. What is the relationship between corporate social responsibility and performance of deposit money banks in Nigeria?
1.5 RESEARCH HYPOTHESES
H0: There is no significant relationship betweencorporate social responsibility andnet profit marginof deposit money banks in Nigeria.
H1: There is a significant relationship betweencorporate social responsibility andnet profit marginof deposit money banks in Nigeria.
H0: There is no significant relationship between corporate social responsibility and performance of deposit money banks in Nigeria.
H1: There is a significant relationship between corporate social responsibility and performance of deposit money banks in Nigeria.
1.6SIGNIFICANCE OF THE STUDY
The study will be of profound benefits to provide information about CSR in relation to corporate institutions especially the listed deposit money banks in Nigeria. It is also expected that the results of this study would produce relevant material for scholarly discourse in management science relating to corporate social responsibility and performance. Another benefit is that in a truly global economy, deposit money banks in Nigeria would be more responsible and become citizens. Banks would more easily and willingly respond to the social needs of the societies where they operate. The findings and conclusion may enable the regulators to know the nature of demand placed on deposit money banks in Nigeria and ways banks have responded to them. The work is important to the government, host communities and non-governmental organizations involved in development programs. The results provide useful evidence to other emerging sectors such as insurance, which is closely related to deposit money banking sector. This study would also be of immense benefit to students and scholars who are interested in developing further studies on the subject matter.
1.7 SCOPE AND LIMITATION OF THE STUDY
The study is restricted to the effect of corporate social responsibility on performance of deposit money banks in Nigeria.
LIMITATION OF THE STUDY
Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)
Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.8OPERATIONALDEFINITION OF TERMS
Corporate Social Responsibility: also know as corporate responsible, corporate citizenship. Responsible businesses sustainable responsible business or corporate performance is a form of corporate self regulation that is integrated into business model a way in which business would proactively promote the interest of the public by getting involved in community growth and development and voluntary eliminating practices that harm the public regardless of legality.
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