Corporate Social Responsibility Practices and Corporate Financial Performance Tradeoff (An empirical study on Banking Sector in Ethiopia)

The effect of Corporate Social Responsibility practices on the financial performance is a matter of considerable importance for the firm’s management and also to different stakeholders.  In this study, pertinent primary and... [ view full abstract ]

The effect of Corporate Social Responsibility practices on the financial performance is a matter of considerable importance for the firm’s management and also to different stakeholders.  In this study, pertinent primary and secondary data were used to answer three basic research questions: How do firms’ CSR practices are quantified? Do CSR practices have significant effect on the banking firm’s performance? Is there any optimal CSR practice that could maximize the benefit of both the firm and society? Even if such questions of fact have been the subject of several studies, no consensus has yet been reached. Hence, firms’ financial contributions to the community in the form of donations as well as content analysis were used to quantify the CSR practices. The finding shows that, there is no significant relationship between firms’ CSR engagement and CFP. To conclude, a lot of improvements are expected from banking firms to discharge CSR properly.