Title: Corporate Social Responsibility and its Influence on Firm Reputation and Financial Performance. A Case Study of Equity Bank, Wandegeya.
Authors: Dr Ariyo Gracious Kazaara
Akampurira Sarah
Ahumuza Audrey
Volume: 8
Issue: 8
Pages: 202-207
Publication Date: 2024/08/28
Abstract:
This study investigated the relationship between Corporate Social Responsibility (CSR), firm reputation, and financial performance. A mixed-methods approach was employed, including quantitative analysis of CSR and financial performance data, qualitative assessment of firm reputation through stakeholder surveys, and case study analysis of selected companies. The quantitative analysis revealed a statistically significant positive correlation between CSR expenditure and financial performance metrics, including Return on Assets (ROA), Return on Equity (ROE), and stock performance. The qualitative assessment highlighted the positive impact of CSR on firm reputation, with stakeholders generally perceiving companies with strong CSR initiatives as more trustworthy and ethical. The case study analysis provided real-world examples of how CSR activities are integrated into business strategies and their impact on reputation and financial performance. The findings underscored the strategic importance of CSR for enhancing financial performance, aligning with established theories such as Stakeholder Theory, Resource-Based View, Signalling Theory, and Legitimacy Theory. The study's findings demonstrate a compelling link between Corporate Social Responsibility (CSR) expenditures and improved financial performance across key metrics such as Return on Assets (ROA), Return on Equity (ROE), and stock performance. The positive relationships observed are consistent with established theories, including Stakeholder Theory, which highlights the benefits of stronger stakeholder relationships, and the Resource-Based View, which suggests that CSR can be a valuable strategic resource.