CORPORATE SOCIAL RESPONSIBILITY AND FINANCIAL PERFORMANCE OF MANUFACTURING FIRMS LISTED AT NAIROBI SECURITIES EXCHANGE IN KENYA

Betty Syonzau Ngangi, Dr. Richard Ngali, Ph.D, CFE

Abstract


Kenya's manufacturing industry has been declining in its contribution to the country’s GDP over the last 5 years with the year 2017 reporting the worst performance in the industry’s contribution to GDP (KAM, 2018). Therefore, this study intended to answer the question of whether manufacturing firms benefit financially when they engage in CSR and what number of resources should be allocated for the firms to obtain significant results. The general objective of this study was to establish the effect of Corporate Social Responsibility on the Financial Performance of manufacturing firms listed on the Nairobi Securities Exchange, Kenya. Specifically, the study sought to determine the effect of environmental sustainability initiatives and employee-focus corporate expenditures on the financial performance of manufacturing firms listed at the Nairobi Securities Exchange in Kenya. This study is guided by four theories; the Triple Bottom Line Theory, and Stakeholder Theory. The research design used in this study was descriptive study design. The population for this study constituted 9 firms listed under the manufacturing, construction and allied sectors at the NSE. The study used the census since the sample size was small. The study used a structured schedule to collect secondary data. The study used Statistical Package for Social Sciences (SPSS) and R console to analyze the data descriptive statistics. The study concludes that the environmental sustainability initiatives expenditure influenced the financial performance of manufacturing companies listed on the NSE in Kenya. In addition, the study concludes that employee-focus corporate expenditure influenced the financial performance of manufacturing companies listed on the NSE in Kenya. From the findings, the study recommends intensification of environmental sustainability initiatives activities in an effort to improve the financial performance of manufacturing companies listed on NSE in Kenya. In addition, the study recommends that firms to enhance employee-focus corporate activities in an effort to improve the financial performance of manufacturing companies listed on the NSE in Kenya.

Keywords: Environmental Sustainability initiatives expenditure, Employee-Focus expenditure, Financial Performance, Manufacturing firms


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