CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Corporate social responsibility (CSR) has become an increasingly important issue in current

business scenarios in this present business era. The rapid diffusion of CSR practices could be

attributed to the positive influence of CSR on organizational performance such as profits after

tax. Organizations operate in a given environment characterized by dynamism, complexity and

uncertainty and managers must take into consideration the interests of many external public

(stakeholders and society) in the performance of their organizations duties. More than ever

before, stakeholders demand that business functions in a responsible way.

Mohammed (2023) observed that, firms who spends high cost on CSR will have better

performance and relatively superior in their performance. Furthermore the corporation following

CSR can attract more investors as compare to other organizations which are not focusing on

corporate social responsibility. It is believed that if a company will follow CSR and try to satisfy

their stakeholders then it will definitely be able to beat competitors. It also helps to minimize the

upcoming errors and dispersions of business.

Idris (2021), posited that, companies should also take into consideration the effect of their

activities on the members of the society in which the companies are residing and the

environmental sustainability of their operations. A lot of companies and their managers have

neglected the problems created by corporate firms to their host communities. These problems

pose a lot of threats and sometimes make life difficult for these communities. The privilege given

to organizations to operate in the society stems from the fact that isociety ibelieves ithat ithere iis

ia imutual iinterdependency iexisting ibetween ithem, ithat iis, ithe iorganization iand ithe

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isociety. iIn ithe ilast iyears, ithe icall ifor iincreased isocial iresponsibility, iby igovernments,

iinvestors iand icorporations, iwas idistinctive iand iurgent idue ito ithe iglobal icrises ithat itook

ia icentral irole, ifinancial imarket ibreakdowns, isevere ieconomic ideclines iand ifood

ishortages ithat irequired iimmediate iresponses. iMore also, iclimate ichange ialso icalled ifor

iattention, iespecially iwith igrowing irecognition iof icritical iconsequences iwithout ia

isignificant ichange iin ithe icourse.

Society igenerally iconsists iof idiverse ielements iand iit iis iwithin ithese icharacteristic

ielements ithat iorganisations iexist. iThe iinterrelatedness ibetween ithe igeneral isociety iand

ibusiness iorganisations ican ibe iexplained ithrough ithe isystems itheory. iSystems itheory

ihelps ius ito iunderstand ihow ibusiness iand isociety, itaken itogether, iform ian iinteractive

isocial isystem. i iEach ineeds ithe iother, iand ieach iinfluences ithe iother. iThey iare

iinterwoven iso icompletely ithat iany iaction itaken iby ione iwill isurely iaffect ithe iother.

iThey iare iboth iseparate iand iconnected. iHence, ibusiness iis ipart iof isociety, iand isociety

ipenetrates ifar iand ioften iinto ibusiness idecisions.CSR iactions iin ithis irespect ialso ihelp

icorporations ito iattract iand iretain inot ionly icustomers ibut ialso imotivated iemployees,

iwhich iin iturn iensure ilong-term isurvival iof ithe icorporation. iCompanies iwith good isound

impact on the society iand developed i ipositive isocial iidentity iand ienjoyed iincreased iloyalty

ifrom iboth icustomers iand iemployees. (Idris 2021).

iDamodaran, (2017). (Firm ivalue iis iseen ias ienterprise ivalue irepresents ithe ientire

ieconomic ivalue iof ia icompany. iMore ispecifically, iit iis ia imeasure iof ithe itheoretical

itakeover iprice ithat ian iinvestor iwould ihave ito ipay iin iother ito iacquire ia iparticular ifirm

i(Khan, iTanveer i& iMalik, i2017). iA iwell iplanned iand iintegrated iCSR iactivity ihas ithe

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ibrand iand icompany ireputation iincreased, igreater iopportunities iopened iup iwhich

ienhances ifaster iinnovation iof iboth iproducts iand iservices iwhich iboost ithe ifirm ivalue. i

Today, imost icorporate imanagers ibelieve ithat ibusiness ioperations ishould igo ibeyond ithe

isimple iprospect iof imoney imaking. iThus, imanagers ishould itry ias imuch ias ipossible ito

iincorporate ithe iinterest iof ithe iemployee, ibusiness ipartners, icustomers, ishareholders iand

ithe isociety iat ilarge iinto itheir idecision imaking iwhich ioffers ithe ibest iguarantee ifor

iconsistent iperformance.

The istudy iwill iuse icommunity idevelopment iexpenditure i(CDE) iproxy iby icost iof

iproviding isocietal ibasic ineeds isuch ias ihealth, ieducation, iwater, ielectricity. iEnvironmental

iexpenditure i(EE) iwill ibe iproxy iby icosts iof ipreventing, ireduce ior irecover idamages ithat,

ithe ientity ihas icaused ior iis ilikely ito icause ion ithe ienvironment ias ia iresult iof iits

iactivities. iThese iinclude iprevention, ielimination ior ireduction iof iwaste iand iwastewater,

iair iemissions, itreatment iof icontaminated isoil, igroundwater, inoise iand ivibration ilevels,

ithe ilandscape ichanges, iresearch iand iinnovation iof iproducts iand icleaner iproduction

iprocesses, icontrol iof ienvironmental iquality. iEmployees iExpenditure/Welfare i(EEW) iwill

ibe iproxy iby icost iof iallowances, ihousing, itransportation, imedical iinsurance iand ifood.

iHowever, iit iis ipertinent ito iascertain iwhether iincurring ithese icost ior iexpenditure ias

isocial iresponsibility iby icompanies ican ileads ito ifirm ivalue.

1.2 Statement iof iResearch iProblem i

The corporate social responsibility is a major issue that attracted attention of many

researchers in the world regarding the responsibility of firms towards its immediate

environment and society that can bring tremendous development to the economy and socio

political relationship. This is the channel where integrated economy in the world can find

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lasting solution to the challenges faced by firms regarding environmental impacts on the

financial performance of listed firms in Nigeria (Abubakar, 2016). The demand for stable

environment and minimization of cost in the operation of oil and gas sector in the world as

necessitated firms to address the menace brought to the stakeholders and society

(Uwuigbe and Jimoh, 2012).

The previous development of oil and gas firms in Nigeria was characterized with several

financial and social challenges regarding corporate social responsibility to the stakeholders

within business environment. Over the past decade, oil and gas sector in Nigeria was

characterized with various financial and social challenges that resulted to low development

among the firms (Gauobadia, 2002). It was emphasized by various researchers that firms should

integrate social, cultural, economic and environmental issues into business policy for the purpose

of meeting needs of various stakeholders (Lee & park, 2010).

The oil and gas sector in Nigeria has been criticized by various people regarding its failure to

render social and environmental responsibility to the stakeholders in its immediate

environment; and it was also noted that environmental degradation regarding air and water

pollutions had affected drinkable water and ocean fish along with the destruction of industrial

machine (Uwaoma and Ordu, 2016). It is also a process of integrating social and environmental

demands for the purpose of finding solution on its menace to various stakeholders within and

outside business operation (Uadiale and Fagbemi, 2012).

Ofurum and Ngoke (2022) argued that many firms failed to fulfill their corporate social

responsibility to the various stakeholders in Nigeria however, the result of the study

discovered cost of corporate social responsibility has a positive relationship with the financial

performance. Ogala etal. (2021) said that corporate social responsibility displayed positive

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relationship with the financial performance of oil and gas sector in Nigeria. Adewoye etal

(2018) discussed on the effects of militancy on the operation of oil and gas sector and the study

discovers a positive relationship exist between corporate social responsibility and financial

performance of oil and gas firms in Nigeria. In the study above, it was realized that some listed

firms were not disclosing their social and environmental responsibility towards people in the

society and this resulted to land, sea and air pollutions which call for a gap to be filled in

examining the current position of corporate social responsibility and financial performance of oil

and gas sector in Nigeria. Also, Ofurum and Ngoke (2022), Chukwuebuka etal. (2021) and

Adewoye etal. (2018) confirmed that corporate social responsibility had significant effects on

financial performance oil and gas however, Ogala etal. (2021) discovered negative relationship

between corporate social responsibility and financial performance of oil and gas sector in

Nigeria, and the study notice that only return on asset was used as a proxy for financial

performance. The conflicting findings on corporate social responsibility and financial

performance nexus above prompted this study to further consider impact of corporate social

responsibility expenditure on firm value of oil and gas companies in Nigeria.

1.3 i Objectives iof ithe iStudy

The imain iobjective iof ithis istudy iis ito iexamine ithe icorporate isocial iresponsibility

iexpenditure ion ifirm ivalue iof iselected ioil iand igas icompanies iin iNigeria iwhile ithe

ispecific iobjectives iare ito: i

i. Evaluate ithe ieffect iof iCommunity iDevelopment iExpenditure ion ifirm ivalue iof

iselected ioil iand igas icompanies iin iNigeria.

ii. Determine ithe ieffect iof iEnvironmental iExpenditure ion ifirm ivalue iof i iselected ioil

iand igas icompanies iin iNigeria.

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 iii. iAssess ithe ieffect iof iEmployees’ iExpenditure/Welfare ion ifirm ivalue iof i iselected

ioil iand igas icompanies iin iNigeria

1.4 i Research iQuestions

This iresearch iwork iis iguided iby ithe ifollowing iresearch iquestions:

i. To iwhat iextent idoes icommunity idevelopment iexpenditure iaffects ithe ifirm ivalue

iof i iselected ioil iand igas ifirms iin iNigeria?

ii. How idoes iEnvironmental iExpenditure iaffect ithe ifirm ivalue iof i iselected ioil iand

igas ifirms iin iNigeria?

iii. What iis ithe ieffect iof iEmployees’ iExpenditure/Welfare ion ifirm ivalue iof i iselected

ioil iand igas ifirms iin iNigeria?

1.5 i Statement iof iHypotheses

The ifollowing ihypotheses iare iformulated iand iare ias ifollows:

Ho1 Community iDevelopment iExpenditure ihas ino isignificant ieffect ion ifirms’ ivalue iof i

iselected ioil iand igas icompanies iin iNigeria. i

Ho2 Eenvironmental iexpenditure ihas ino isignificant ieffect ion ieffect ion ifirms’ ivalue iof i

iselected ioil iand igas icompanies iin iNigeria. i

Ho3 Eemployees’ iExpenditure/Welfare ihas ino isignificant ieffect ion ieffect ion ifirms’

ivalue iof i iselected ioil iand igas icompanies iin iNigeria. i

1.6 Significance iof ithe iStudy

The iresearch iis iaimed iat ienlightening ithe iorganizations iinvolvement ion icorporate isocial

iresponsibility iexpenditure ion ifirm ivalue. iPolicy imakers iwill ifind ithe istudy irelevant

ibecause iit iwill ihelp iin iformulating ipolicies ito iadopt iin icarrying iout icorporate isocial

iresponsibilities isuch ithat iwould iimpact ipositively ion itheir iperformance. i

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It iis ibelieved ithat ithis istudy iwould ibe ia ivaluable icompendium ibecause ithe iempirical

ifindings irevealed ihow iCSR iexpenditure isuch ias icommunity idevelopment iexpenditure,

ienvironmental iand iemployees’ iexpenditures iimpact ion icorporate iperformance. iThis istudy

iwill iadd ito ithe igrowing ibody iof iempirical iefforts iand iliterature ion ithe iimpact iof iCSR

iexpenditure ion ithe ifirm ivalue iin ithe ioil iand igas isector iin igeneral. iIt iwould ialso

ienhance ithe icomparability iof ithe iresults iobtained iin ithis istudy iwith ithose iof iprevious

iones icarried iout iin idifferent ieconomies iwith ideveloped imoney iand icapital imarkets,

istable ipolitical isystems, iand iindependent iand iincorruptible ijudiciary. iOperators iin ithe

iNigeria’s ioil iand igas icompanies iwould ifind ithe iresults iof ithis idissertation ivery iuseful

iin irealigning iand irepositioning itheir iprinciples, ipolicies iand ibudgets iwith iregard ito iCSR

iexpenditure. iFindings ion iCSR iexpenditure iwith iproxies ion icommunity idevelopment

iexpenditure, ienvironmental iand iemployees iexpenditures iand ihow ithey iimpact

iindependently ion ithe ifirm ivalue iand iwould ihelp istakeholders iin ithe icompanies ito

iappraise ithe istate iof iaffairs iwithin ithe icontext iof ibenefits iand ilosses. iThis istudy iwill

iserve ias ia ireference ipoint ifor ifurther iresearches. I

1.7 Scope iof ithe iStudy

This iresearch iis irestricted ito ithe icorporate isocial iresponsibility iexpenditure ion ifirm

ivalue iof i iselected ioil iand iGas iCompanies iin iNigeria. iThe iperiod iof istudy icovers i10

iyears ifrom i2013 ito i2022. iThis iperiod iinvolved ia idemocratic iera iwhen iemployees,

icustomers, icitizen iand ishareholders i(stakeholders) ilearned ito ifreely idemand ithat

icompanies ithat ioperate iwithin itheir iland ishould ibe isocially iresponsible ifor ithe idamage

ithey icause ito ithe iland. iThis iperiod iis ilong ienough ito iassess ithe ieffects iof icorporate

isocial iresponsibility iexpenditure ion ifirm ivalue iin ilisted ioil iand igas icompanies iin

iNigeria.

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 CHAPTER iTWO i

LITERATURE iREVIEW i

2.1 Conceptual iFramework

This isection ifocus ion ithe ivarious iconcepts iof icorporate isocial iresponsibility iand ifirm

ivalue. iThe idiscussion ifocuses ion ithe idefinitions, iand ivarious iviews iwith irespect ito

icorporate isocial iresponsibility iand ifirms’ ivalue.

2.1.1 Concept iof iCorporate iSocial iResponsibility i

Corporate isocial iresponsibility ican ialso ibe idefined ias ithe isense iof iresponsibility iof ithe

iorganization itowards isocial ienvironment iand icommunity. iEuropean iCommission i(2006)

iaffirms, ithe iCSR iis ia iconcept iwhereby icompanies iintegrate isocial iand ienvironmental

iconcerns iin itheir ibusiness ioperations iand iin itheir iinteraction iwith itheir istakeholders ion

ia ivoluntary ibasis. iCorporate isocial iresponsibility iunderstanding iis ilimited idue ito ithe

ivast iand iabsence iof iconsensual idefinitions iof ithe iconcept. iCSR irefers ito ithe

iresponsibility iof ithe istakeholders iand ithe icommunity ithat iinfluence icorporate ipolicies

iand ipractices iand iCSR iis ialso iconsidered ito ibe iinfluenced iby ithe iinstitutional

ienvironment iin iwhich icompanies ioperate i(Gilbert, i2008). i

In the view of Okechukwu i(2022) posited that, iorganization iis isocially iresponsible iwhen iit

idoes inot irestrict iitself iwithin ithe iminimum irequirement iof ithe ilaw ibut irather, igoes

ibeyond iit. iHe itherefore iviews icorporate isocial iresponsibility ias ithe iacceptance iof isocial

iobligation iby ian iorganization ibeyond iwhat ithe ilaw irequires. IPaul and Ken (2023) iiview

isocial iresponsibility ias ithe iobligation iof ia imanager ito ienhance ithe iwelfare iof ithe

istakeholders iand ithe isociety iin igeneral. In other way, Balai(2022)icorporate isocial

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iresponsibility imeans ithat ia icorporation ishould ibe iheld iaccountableifor iany iof iits iactions

ithat iaffect ipeople, icommunities, iand iits ienvironment. iIt iimplies ithat inegative ibusiness

iimpacts ion ipeople iand isociety ishould ibe iacknowledged iand icorrected, iif ipossible. i

iiCorporate isocial iresponsibility ioccurs iwhen ifirms iengage iin ian iactivity ithat iappears ito

iadvance ia isocial iagenda ibeyond ithat iwhich iis irequired iby ilaw (Salau 2022).

2.1.2 Schools iof ithoughts ion iCorporate iSocial iResponsibility

Having iconceptualized isocial iresponsibility ithere iis ithe ineed ito iexamine ithe ivarious

ischools iof ithoughts ion iCSR. iHence ithis isection idiscusses ithe ivarious ischool iof

ithoughts ion iCSR. iFrom ithe idefinitions ithe ifollowing ican ibe ideduced:-corporate isocial

iresponsibility iis iwhen icompany ido ibeyond ithe ilegal irequirement iin iits iactivities ito ithe

ihost isociety, iCSR iis iwhen icompany itakes iresponsibility ifor ithe iimpact iof iits iactivities

iin ithe ihost icommunity iand iprovide iremedies ito icushion iits ieffect. iCSR iis ia

icommitment iby icompany ito iimprove ithe iwelfare/wellbeing iof iits ihost icommunity

iwithout ibeing icoerced. iCSR iis isacrificing iprofit ifor isocial iinterest, iprofit ithat ishould

ihave ibeen idistributed ias idividends iare iused ito iprovide isocial ifacilities ifor ithe ihost

icommunity. i

iJennings i(2016) cited by Aliyu (2022) ia ibusiness ioften isets ithe itone ifor iits ioperation iand

iemployees’ ichoices. iHistorically, ithe iphilosophical idebate iover ithe irole iof ibusiness iin

isociety ihas ievolved iinto ifour ischools iof ithought ion iethical ibehaviour ibased ion

iresponses ito itwo iquestions iwhose iinterest ishould ia icorporation iserve iand iwhom ishould

ia icorporation ibe iresponsive iin iorder ito ibest iserve ithat iinterest? iJennings i(2016) iposited

ithat ithere iare ionly itwo ianswers ito ithese iquestions- i‘shareholders ionly’ iand i‘the ilarger

isociety’- iand ithe icombination iof ithose ianswers idefines ithe ischool iof ithought. iThese

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iinclude: iInherence: iAccording ito iJennings i(2016), iin ithe iinherence ischool iof ithought,

imanagers ianswers ionly ito ishareholders iand iact ionly ito ishareholder’s iinterest iin imind.

iThis itype iof imanager iwould inot iinvolve iin iany ipolitical ior isocial iissues iunless isit iwas

iin ishareholders’ ibest iinterest ito ido iso, iand iprovided ithat ithe iinvolvement iwill inot

ibackfire iand icost ithe ifirm isales. i

Enlightened iSelf-Interest: iAccording ito ithis ischool iof ithought, iJennings i(2016)

isubmitted ithat ithe imanager iis iresponsible ito ithe ishareholders ibut iserves ithem ibest iby

ibeing iresponsible ito ithe ilarger isociety. iIn ithis ischool, imanagers iare ifree ito ispeak iout

ion isocietal iissues iwithout ithe iconstraint iof ioffending isomeone. iFor iexample, iJennings

i(2006) iopined ithat imany icorporations iare inow iinstituting ijob isharing, ichildcare

ifacilities, iand isick-child icare iin iresponse ito ithe ichanging istructure iof ifamilies iand

iworkforce. iThe iresponsiveness ito ithe ineeds iof ithe ilarger isociety ishould ialso ibe

ibeneficial ito ithe ishareholders, ibecause iit ienables ithe ibusiness ito iretain ia iquality

iworkforce.

The iInvisible iHand: iThe iinvisible ihand ischool iof ithought iis ithe iopposite iof

ienlightened iself-interest. iAccording ito ithis iphilosophy, ibusiness iought ito iserve ithe ilarger

isociety iand iit idoes ithis ibest iwhen iit iserves ithe ishareholders ionly. iSuch ibusinesses

iallow igovernment ito iset istandard iand iboundaries ifor iappropriate ibehavior iand isimply

iadhere ito ithese igovernmental iconstraints ias ia iway iof imaximizing ibenefits ito itheir

ishareholders. iThey ibecome iinvolved iin iissues ionly iwhen isocietyilacks isufficient

iinformation ion ian iissue ito imake ia idecision. iEven ithen, itheir iinvolvement iis ilimited ito

ipresenting idata iand idoes inot iextend ito iadvocating ia iparticular iviewpoint ior iposition.

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iThis ischool iof ithought iholds ithat iit iis ibest ifor isociety ito iuphold iitself iand ithat

ibusinesses iwork ibest iwhen ithey iserve ishareholders iwithin ithose iconstraints.

Social iResponsibility: iIn ithe isocial iresponsibility ischool iof ithought, iJennings, i(2016)

istated ithat ithe irole iof ibusiness iis ito iserve ithe ilarger isociety, iand ithat iis ibest

iaccomplished iby ibeing iresponsive ito ithe ilarger isociety. iThis iview iis isimply ia ireflection

iof ithe iidea ithat ibusinesses iprofit iby ibeing iresponsive ito isociety iand iits ineeds. iA

ibusiness ifollowing ithis ischool iof ithought iwould iadvocate ifull idisclosure iof iproduct

iinformation ito iconsumers iin iits iadvertising iand iwould iencourage ipolitical iactivism ion

ithe ipart iof iits imanagers iand iemployees ion iall iissues, inot ijust ithose ithat ireflect ithe

icorporation. iThese ibusinesses ibelieve ithat itheir isense iof isocial iresponsibility icontributes

ito itheir ilong iterm isuccess..

2.1.4 Concept iof iCommunity iDevelopment iExpenditure

Adema, iFron iand iLadaique i(2011) cited by John (2023)isocial iexpenditures ias ithe

iprovision iby ipublic iand iprivate iinstitutions iof ibenefits ito, iand ifinancial icontributions

itargeted iat, ihouseholds iand iindividuals iin iorder ito iprovide isupport iduring icircumstances

iwhich iadversely iaffect itheir iwelfare, iprovided ithat ithe iprovision iof ithe ibenefits iand

ifinancial icontributions iconstitutes ineither ia idirect ipayment ifor ia iparticular igood ior

iservice inor ian iindividual icontract ior itransfer”. iSince ionly ibenefits iprovided iby

iinstitutions iare iincluded iin ithe isocial iexpenditure idefinition, itransfers ibetween

ihouseholds i- ialbeit iof ia isocial inature i- iare inot iin ithe isocial idomain. iSocial ibenefits

iinclude icash ibenefits i(e.g. ipensions, iincome isupport iduring imaternity ileave, iand isocial

iassistance ipayments), isocial iservices i(e.g. ichildcare, icare ifor ithe ielderly iand idisabled)

iand itax ibreaks iwith ia isocial ipurpose i(e.g. itax iexpenditures itowards ifamilies iwith

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ichildren, ior ifavourable itax itreatment ioficontributions ito iprivate ihealth iplans).From ithe

iforegoing icommunity iexpenditures iare iexpenditure iincurred iby icorporate ientities ifor

isocial ipurposes iwhich ican ibe icash ior ibenefit iin ikind. iThese ipayments iare inot idirectly

ifor ithe iservices irendered iby ithe iindividuals ibut irather iit iis ian iact iof ibenevolence iby

ithe icompany. iIt ican iinclude iprovision iof ihealthcare ifacilities, iconstruction iof

iclassrooms, iprovisions iof iportable iwater iand ipower ifor icommunity iuse

2.1.5 Concept iof iEnvironmental iExpenditure i

Abubakar (2023). Environmental iexpenditures iare ithe icost iof idegrading ienvironmental

iquality ifor ithe idifferent iacts idone iby isociety, iorganization. iThese icosts iare isignificant

icomponent ito icost istructure iand icannot ibe ihidden ioverhead ilike itraditional imanagement

iaccounting isystems.

2.1.6 Concept iof iEmployee iexpenditure

Bala (2021) define Employee iexpenditure ias ivarious iservices, ibenefits iand ifacilities

ioffered ito iemployees iby ithe iemployers. The iemployees iexpenditures imeasures isuch ias

iallowances, ihousing, itransportation, imedical iinsurance iand ifood.

2.1.7 Concept iof ifirm’s ivalue

Organizational iperformance iis ithe icomparison iof ithe iactual iresults iof ian iorganization

iwith iits iintended iresults.( John 2020) as cited by Musa (2022) IThe iterm iperformanceis ia

icontroversial iissue iin ifinance ilargely ibecause iof iits imultidimensional imeanings i(Mihaela

i2022). iPerformance ican ibe idefined ias ioutcome-based ifinancial iindicators ithat iare

iassumed ito ireflect ithe ifulfilment iof ithe ieconomic igoals iof ithe ifirm. iThe iperformance

ilevel iof imost iof ibusiness ihas ibeen imost iunsatisfactory, ias ithe iproblems iof idelay iin

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idelivery iof iservices iand ihigh icost iof iservice idelivery ihas ibecome ia inorm irather ithan

ian iexception. I

2.2 Theoretical iFramework i

It iis itantamount ito icorporate iphilosophy iand iconsidered istrictly ias irelating ito

ienvironmental ipolicy. iThe iuse iof iCSR ito icapture ivalue iperformance ireferred ito ias

istrategic iCSR iby iBaron i(2001) iwho istated ithat i“ iit iis ithe imotivation ifor ithe iaction

ithat iidentifies isocially, ias iopposed ito iprivately iresponsible iaction’, iThat iis, iif ithe

imotivation iis ito iserve isociety ias iopposed ito iprivately iresponsible iaction ior iif ithe

imotivation iis ito iserve isociety iat ithe icost iof iprofit, ithe iaction iis isocially iresponsible

ibut iif iother iwise ito iserve ithe ibottom iline, ithe iaction iis iprivately iresponsible. iThese

itheories iinclude:

2.2.1 Stakeholder iTheory i

Normative itheory iof istakeholder iis iused ito iinterpret ithe ifunction iof ithe icorporation iand

iidentify imoral ior iphilosophical iguideline ifor icorporation ioperations. iIt itries ito istipulate

iwhat ishould ihappen ibased ion imoral ivalue. iOne iof ithe iarchitects iof ideontological

itheory ibelieved ithat iindividuals ihave ithe iright ito ibe itreated ias iends iin ithemselves iand

inot imerely ias ia imeans ito ian iendiand i iDonaldson iand iPreston i(1995) iargued ithat

iultimate ijustification ifor istakeholder itheory iis ito ibe ifound iin iits inormative ibase. i

According ito ithis itheory ithe ipurpose iof ithe icompany i iis ito iprovide ireturn ion

iinvestment ifor ishareholders iand ithus icorporations iare iseen ias iinstruments iof icreating

ieconomic ivalue ifor ithose iwho irisk icapital iin ithe ienterprise i(Greenwood, i2001). iIt iis

ibelieved ithat ithe isole iconstituency iof ibusiness imanagement iis ithe ishareholders iand ithe

isole iconcern iof ishareholders iis iprofit imaximization. iAny iactivity iis ijustified iif iit

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iincreases ithe ivalue iof ithe ifirm ito iits ishareholders iand iis inot ijustified iif ithe ivalue iof

ithe ifirm iis ireduced i(Cochran, i1994). iThe imajor iproponent iof ithe i“constrained iprofit-

making iview” iis iFriedman i(1998), iwho ibelieved icompanies ishould ibehave ihonestly: ithat

iis, ithey ido inot iengage iin ideception iand ifraud. iThis ieconomist iargues ithat ithe ipurpose

iof ithe icompany iis ito imake iprofits ifor ishareholders. iThe ionly iresponsibility iof ibusiness

iis ito iuse iits iresources ito iengage iin iactivities idesigned ito iincrease iits iprofits iso ilong ias

iit istays iwithin ithe irules iof ithe igame. iBecause imanagers iare iagents iof ithe ishareholders

ithey ihave ia iresponsibility ito iconduct ibusiness iin iaccordance iwith itheir iinterest. i

2.2.2 iRelational iTheory

Relational itheory ihas ia iroot ifrom ithe icomplex ifirm-environment irelationships. iBusiness

iand icommunity iis iproposed ito imean i‘business iin isociety’ iin iwhich iCSR iemerges ias ia

imatter iof iinteraction ibetween ithe itwo ientities. iOne iof ithe imeasures iof iCSR iis ithe

idevelopment iof ieconomic ivalues iin ia isociety. iAnother iis ia iperson’s iobligation ito

iconsider ithe ieffects iof ihis idecision iand iaction ion ithe iwhole isocial isystem. iStated iin

ithe iform iof ia igeneral irelationship, isocial iresponsibilities iof ibusinessmen ineed ito ireflect

ithe iamount iof isocial ipower ithey ihave.Stakeholder iapproach ihas ibeen ideveloped ias ione

iof ithe istrategies iin iimproving ithe imanagement iof ithe ifirm. iIt iis ialso isaid ias ia iway ito

iunderstand ireality iin iorder ito imanage ithe isocially iresponsible ibehaviour iofia ifirm. iThe

istakeholder iapproach ifurther iconsiders ia ifirm ias ian iinterconnected iweb iof idifferent

iinterests iwhere iself-creation iand icommunity icreation ihappen iinterdependently; iand

iindividuals ibehave ialtruistically. iBased ion iGarriga iand iMele’s i(2004) ianalysis,

istakeholder iapproach iis iboth iwithin ithe iintegrative iand iethical itheories, iwhere ithe

iformer iemphasizes ithe iintegration iof isocial idemands iand ithe ilatter ifocuses ion ithe iright

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ithing ito iachieve ia igood isociety. iThese isupported ithe iwork iof iMitchel, iAgle iand iWood

i(1997) iwhere ibalances iamong ithe iinterests iof ithe istakeholders iare ithe iemphases; iand

isupported iby ithe iwork iof iFreeman iand iPhillips i(2002) ithat iconsiders ifiduciary iduties

itowards istakeholders iof ithe ifirms, irespectively. i

Corporate icitizenship iof ithe irelational itheory istrongly idepends ion ithe itype iof icommunity

ito iwhich iit iis ireferred. iIt iis iexpected ithat ia icorporation imay itake ito ibehave

iresponsibly. iFundamentally, iit iis iabout ithe irelationship ithat ia icorporation idevelops iwith

iits istakeholders, iand itherefore, ithe iformer ihas ito icontinuously isearch ifor iengagement

iand icommitment iwith ithe ilatter. iCorporate icitizenship ibased ion iGarriga iand iMele’s

i(2004) ianalysis iis ian iapproach iused iunder ithe iintegrative.

2.2.3 Social iContract iTheory

Social icontract itheory iof ithe irelational igroup irefers ito ithe ifundamental iissue iof

ijustifying ithe imorality iof ieconomic iactivities iin iorder ito ihave ia itheoretical ibasis ifor

ianalyzing isocial irelations ibetween icorporation iand isociety. iHence, iCSR iis iderived ifrom

ithe imoral ilegitimacy ithe icorporation iachieves iin ithe isociety iand iunderstanding iabout

iCSR iis icontained iin ithe ijustification iof isocial iactions ithat ilegitimize ithe ibehaviour iof

ithe icorporation. iGarriga iand iMele’s i(2004) ianalysis iputs ithe isocial icontract itheory

iunder ithe igroup iof iethical itheories, ithe iapproaches iof iwhich iinclude iuniversal irights

i(UN iGlobal iCompact, i1999) iand isustainable idevelopment i(Korhonen, i2003). iBoth

iapproaches iof iCSR iare ibased ion ihuman irights, ilabour irights iand irespect ifor ithe

ienvironment. i

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2.2.4 Institutional iTheory

In ithe iwork iof iMatten iand iMoon i(2008), iinstitutional itheory iis iassociated iwith

icorporate isocial iresponsibility ithrough i(1) ibringing iin iinteractions iand iinter-dependencies

iamong istakeholders iinto iaccount; iand i(2) icreation iof irationalized imyths ithat iregulate

iand istandardize ifirm ipractices ito iexecute icorporate isocial iresponsibility. iInstitutional

itheory iprovides iexplanation ifor ithe iadoption iof iparticular iorganizational ipractices iwithin

ia ispecific iorganizational ifield. iIt iis iwhen iother icompanies itry ito icopy ithe ibest

icorporate isocial iresponsibility ipractices iof ithe imodel iorganization iin iorder ito ilook

isimilar ito iother iorganization ioperating iin ithe isame ienvironment. i

Deegan i(2009) imaintains ithat ithe ifirm’s iadoption iof igood icorporate isocial iresponsibility

ipractices iin ian iindustry iwill ishape ithe isocietal iexpectation. iThus, isociety iwill idemand

ithe isame iresponsible ibehaviour i(adoption iof icorporate isocial iresponsibility) ifrom irest iof

ithe icompanies ioperating iin ithe isame iindustry. iIf ithe iremaining icompanies ido inot

ifollow ithe idesired istandards iand iinstitutional ipractices, ithey imay ibe iconsidered islightly

iriskier. iThe itheory irecognizes isocial, ieconomic, iand ipolitical ifactors ias istructures ithat

iconstitute ian iinstitution iwithin iwhich ithe ibusiness ioperates. i

These iinstitutional istructures iare ibelieved ito iexert isome iconsiderable iinfluences ion ithe

iactions iand idecisions iof ian iorganisation. iOwing ito ithis ifact, iorganisations ineed ito

iestablish ilegitimacy iand iadopt ia iparticular istructural iform ithat iis iprevailing iin ithe

ienvironment iand iwould itherefore ibehave iin icertain iways ithat iare iduly irecognized. iFor

iexample, iaccording ito iCampbell i(2007), iindustrial iassociations icompel iproduct iquality,

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iworkplace isafety, iand ithe ilike iof isocially iresponsible ibehaviours iby isetting istandards ito

iwhich imembers ishould iadhere. iFailure ito iconform ican ibe iseen ias iirrational iand

inegligent iand imight ieven iresult iin isanctions. i

2.2.5 Strategic iTheory iApproach

Our iunderstanding iof iCSR ishould ibe iextended ito ian iexamination iof ithe istrategic iuse iof

iCSR iactivities. iFombrum iand iShanley i(1990) iestablished ithat iinvesting iin iCSR

iattributes iand iactivities imight ibe iimportant ielements iof iproduct idifferentiation iand

ireputation ibuilding. iMcWilliam iand iSiegel i(2001) isuggest ithat iCSR iactivities ibe

iincluded iin istrategy iformulation iand ithat ithe ilevel iof iresources idevoted ito iCSR ibe

idetermined ithrough icost/benefit ianalysis.

Analysis iof ithe istrategic iimplication iof iCSR iis ihampered iby icross-country/cultural

idifferences iin ithe iimplications ithat iregulate imarket iactivity, iincluding iexpectations iand

idifferent ireturns ito iactivity. iFor ibanks ioperating iin imultiple icountries/cultures ithis

icomplicates ithe iprocess iof idetermining iwhich iactivities ito iengage iin iand ihow imuch ito

iinvest. iAs ithe iknowledge ibase iof iCSR idevelops iworldwide, iwe iwill ibe ibetter iable ito

ianalyze iand iadvertise ion iCSR.

The iCSR iliterature isuffers ifrom idefinitional iquestions ithat ilimit ithe ifuture iresearch.

iDistinguishing iamong istrategic iCSR, ialtruistic iCSR, iand ieven icoerced iCSR i(e.g. iHusted

i& iDe iJesus iSalazar, i2006) iconstitutes ia isignificant itheoretical ibreakthrough. iHowever,

iuntil itheory iand iresearch ican iadequately iagree iupon iwhat, ispecifically, iconstitutes iCSR,

iresearch iwill icontinue ito iprovide ia ilack iof iconsistent iresults. iIt iis ito ithis iempirical

iresearch ithat iwe inext iturn iour iattention.

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Problems iwith imeasurement iof ithe icosts iand ibenefits iof iCSR iactivities icontinue ito

icloud iour iunderstanding iof ithe istrategic iimplication iof iCSR. iA imajor iimpediment ito

iempirical iresearch iis ithe icontinuing iconfusion iover idefinition ithat iwe imentioned iabove.

iIt iis ipossible ito imeasure iwhat iwe icannot idefine iand ias ilong ias iwe iuse idifferent

idefinitions, iwe iwill iget iempirical iresults ithat icannot ireliably ibe icompared.

2.2.6 Event iTheory iApproach

Early istudies iused ieither ithe ievent istudy imethodology i(which iis ibased ion ianalysis iof

ishort-run ichanges iin istock iprices ias ia iproxy ifor ifirm iperformance iin ithe iaftermath iof

ia iCSR-related ievent) ioriregression ianalysis i(which iuses ian iaccounting imeasure iof

iprofitability, isuch ias ireturn ion iassets, ias ithe idependent ivariable iin iregression imodel

ithat iexplains ifirm iperformance). iThe istudies iusually iattempted ito ianswer ithe iquestions:

ido ibanks ido iwell iby idoing iwell? iThe ireported iresults ihave iranged ifrom ishowing ia

inegative irelationship ibetween iCSR iand ifirm iperformance, ito ishowing ino irelation, ito

ishowing ia ipositive irelation iwhich imay iresult iin iinconsistency iin idefining iCSR,

iinconsistency iin iresearch idesign, imisspecification iof imodels, ichanges iover itime, ior

isome imore ifundamental ivariance iin ithe isamples ithat iare ibeing ianalyzed.

McWilliams iand iSiegal i(1997) icritiqued ithe iuse iof ithe ievent istudy imethodology ito

imeasure ithe iconsequences iof iCSR. iThe iauthors ireported ithat ithe ifindings iof ievent

istudies iof iCSR iappearing iin itop imanagement ijournals iwere iunreliable, idue ito iserious

iflaws iin ithe iresearch idesign iand iimplementation iof ithe ievent istudy imethodology. iThey

ialso icautioned ithat ithe iuse iof istock iprice ias ia imetric ifor iperformance iis inot

iappropriate ifor istudying iCSR. iThis iis ibecause iCSR iis ia ifirm ilevel imeasure iand imany

isocially iresponsibility iactivities ioccur iat ithe iplant ilevel ior ithe iproduct ilevel. iAnother

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iconcern iis ithat ian ianalysis iof istock iprice ieffects ionly irelates ito ifinancial istakeholders

iand iit iis iclear ithat inon-financial istakeholders iare ialso iaffected iby iCSR iactivities.

Challenge ithe iconventional iregression imodel iused ito iassess ithe ieffect iof iCorporate

iSocial iperformance i(CSP), iwhich iis ioften iused ias ia isynonym ifor iCSR, iand ifirm

iperformance. iThey inoted ithat ithe itypical iregression iequation iestimated iwas imis-specified

ibecause iit idid inot iinclude itwo ikey ivariables: ithe ilevel iof iR&D iand iadvertising

iexpenditures. iBoth iof ithese ivariables ihave ibeen ishown ito ibe ideterminants iof ifirm

iperformance iand, ibecause iall ithree i(R&D, iadvertising iand iCSP) iare ielements iof

idifferentiation istrategy, ithey ihypothesized ithat iR&D iand iadvertising iwould ibe icorrelated

iwith ia imeasure iof iCSP. iThe iresults iof iMcWilliams iand iSiegal’s iestimation iof ithe

icorrectly ispecified, iexpanded iequation idemonstrated ithat ithe ithree iexplanatory ivariables

iwereicorrelated. iThus, ithe imodel ithat iexcluded iR&D iand iadvertising iwere iincluded iin

ithe imodel, iCSP iwas inot ia isignificant ideterminant iof ifirm iperformance, ias ihad ibeen

ireported iin iseveral iwidely-cited istudies. i

Consistent iwith iBaron’s i(2001) idistinction ibetween ialtruistic iCSR iand istrategic iCSR,

iHillman iand iKeim i(2001) iconjuncture ithat iempirical itests iof ithe irelation ibetween iCSR

iand ifirm iperformance ishould idisaggregate iCSR iactivities iinto ithose ithat iare istrategic

i(stakeholder imanagement) iand ithose ithat iare ialtruistic i(social iissue iparticiROAion).

iBased ion iestimation iof ia idisaggregated imodel, ithey ireport ithat ithere iis ia ipositive

irelation ibetween ifirm iperformance i(measure iusing imarket ivalued iadded) iand istrategic

iCSR iand ia inegative irelation ibetween ialtruistic iCSR iand ifirm ivalue. iThis istudy

itherefore iadopted ithe iRelational iTheory iand iInstitutional iTheory iwhich iunderpined ithe

istudy, ieven ithough ivariegated iin inature, ithey ihave icommon iview ion ithe ineed ifor

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icorporate isocial iresponsibility ieither ias ia imoral iobligation. iThis iassertion iwas imade ias

ithis istudy iviewed iall ithe imain ivariables ithat iit ibased itheir iargument.

2.3 Empirical iReview

Solanke , Olasehinde, Adeboboye and Olaniyi (2022) investigated the relationship between

corporate social responsibility and financial performance of listed companies in oil and gas

sector in Nigeria with the use of secondary data. The sample size selected was five quoted

companies’ oil and gas sectors in Nigeria for 2011-2020 financial years with the use of

regression analysis on data collected from Nigerian exchange group. The regression result could

not provide sufficient evidence for the rejection of the two hypotheses that hypothesized that

corporate social responsibility did not significantly contribute to the profitability of selected oil

and gas in Nigeria. However findings shows that economic, donation and legal responsibilities

had significant influence on return on assets (ROA), profit after tax (PAT) and return on equity

(ROE) of the oil and gas firms in Nigeria. The study concluded that corporate social

responsibility had significant relationship with financial performance of listed oil and gas

industry in Nigeria.

Ibrahim and Ademu (2021) investigated the impact of corporate social responsibility on financial

performance of selected listed oil and gas companies in Nigeria. Expo facto research design was

adopted. Population of the study is twelve (12) oil and gas companies and sample of seven (7) .

Secondary data were sourced from the annual reports of listed oil and gas for period of ten years

(2010- 2019. The study employed multiple regression model to analyse the data using stata.

Findings revealed that, corporate social responsibility as significant effects on financial

20
performance of oil and gas companies in Nigeria. The study also revealed that there is significant

relationship between CSR and financial performance of oil and gas companies in Nigeria.

Ofurun and Ngoke (2022) investigated the relationship between the cost of corporate social

responsibility and the financial performance of oil and gas companies in Nigeria. The study

adopted a descriptive research design. Data were obtained from secondary sources and were

analysed using person correlation techniques and it was revealed tha, there is positive

relationship with the financial performance of oil and gas companies in Nigeria.

Festus (2023) investigated the effects of corporate social responsibility on financial performance

of listed oil and gas sector in Nigeria and necessary information was obtained from secondary

data. Its sample size selected was five quoted oil and gas sectors with the financial statements

run from 2011-2020. The regression analysis was employed for the running of the data collected

from Nigerian exchange group. The corporate social responsibility ensures environmental

stability and improvement in the financial statement of an organization. However, in the result

displayed, it was discovered that economic, donation and legal responsibilities had non-

significant influence on return on assets (ROA) and return on equity (ROE) of the oil and gas

firms in Nigeria. The study concluded that corporate social responsibility had non-significant

relationship with financial performance of listed oil and gas industry in Nigeria

Fodio, iAbu-Abdissamad iand iOba i(2023) idetermined ithe iimpact iof icorporate isocial

iresponsibility ion ifirm ivalue iin iquoted iNigerian ifinancial iservices. iThe istudy iuses

iparsimonious iregression imodels ito iexamine ithe iimpact iof iCSR ion imarket ivalue iof

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ifinancial iservices iin iNigeria ifor ithe iperiod i2004-2008. iHuman iResource iManagement

i(HRM), iCommunity iDevelopment i(CD) iandiEnvironmental iPerformance i(EP) iwere

iproxies ifor iCSR. iInvestigation ireveals ithat iHuman iResources iManagement iand

iCommunity iDevelopment ieffort iof iCSR iin ithis isector ihave isignificant iimpact ion

iMarket ivalue. iThere iwas ino isignificant iimpact iof iEnvironmental iperformance ion imarket

ivalue istudy ifirms. iThey iconcluded ithat isocially iresponsible iefforts iof ifirms itrigger

iimproved imarket ivalue iand ithat isuch ivalue iis iinfluenced iby iobservable imoderating

ifactor. There iis itime ilag ibetween ithe iperiod icover iin ithe istudy iand ithe iperiod iin iwhich

ithe istudy iwas iconducted. i

Paul iand iOnyema i(2020) iinvestigate ithe ieffect iof icorporate isocial iresponsibility ion

iorganizational iperformance iin ithe ibanking iindustry iwith ia iparticular ireference ito iUnited

iBank ifor iAfrica. iThey iemployed isurvey iresearch iand iused iprimary idata ithrough ithe

iuse iof iquestionnaires ias iresearch iinstrument. iTwo ihundred iand ififty iemployees iof ithe

ibank iwere iused ifor ithe istudy iin icollecting idata iand idata iwere ianalysed iusing ivarious

ianalytical itechniques isuch ias it-test, iregression, iPearson iCorrelation iand ianalysis iof

ivariance ianalysis. iThe istudy ifound ithat itwo iof ithe iindependent ivariables: icommunity

idevelopment iexpenditure iand ienvironmental iexpenditure ihave isignificant ipositive iimpacts

iand iother ione iemployee iexpenditure inegative iimpact. iUsing iprimary isource ito igathered

idata ion icommunity iand ienvironmental iexpenditure imay ibe ibiased iin inature ithus, ithe

istudy icould ihave iobtain ithe idata ifrom ithe iannual ireport iof ithe ibank.

Mohammed iand iArooj i(2020) iexamined ithe iimpact iof icorporate isocial iresponsibility ion

ithe ifinancial iperformance iof iQuoted iConglomerates iin iNigeria. iThe iresearch idesign

iadopted iby ithe istudy iis icorrelational iand ithe ipopulation iconstitutes iof ithe ieight i(8)

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iconglomerate icompanies iquoted ion ithe iNigeria iStock iExchange. iThe istudy iuses icensus

iapproach iemploying isecondary idata. iThe idata iis ifor ithe iperiod iof sissix years. The istudy

iused iMultiple iRegression iModel ias ithe itechniques iof ianalysis. iThe istudy ifound ithat

itwo iof ithe iindependent ivariables:iCommunity iDevelopment iExpenditure ihave ino

isignificant ieffect, iwhile ienvironmental iexpenditure iand iemployees iexpenditure ihave

isignificant ipositive iimpact.

Ohomo (2019) iinvestigated iwhat irelationship iexists ibetween iCorporate iSocial

iResponsibility iand iOrganization iPerformance iusing iNigerian iBreweries iPL iand iprimary

iand isecondary idata iwere iused. iThe istatistical itool iemployed ifor ianalyzing ithe idata

icollected ifor ithis iresearch iinclude isimple ipercentage, imean iand ifrequency idistribution

itable. iThe iChi-square i(X2) iand ithe iPearson’s icorrelation icoefficient iwere iused ifor

itesting ithe ihypotheses ito idetermine ihow irespondents ireact ito iissue iconcerning iCorporate

iSocial iResponsibility. i iThe istudy ifound ithat ithere iis ia ipositive icorrelation ibetween

iCorporate iSocial iResponsibility, ithe igrowth iand idevelopment iof icompanies. iThe iresult

ialso ishows ithat ithe iorganization iintegrates iCorporate iSocial iResponsibility iinto iits

ioperations ito iimprove iorganizational iperformance. iUsing iChi-Square iis ia iweak itechnique

ito idetermine ihow icorporate isocial iresponsibility irelates iwith iperformance iof ian

iorganization ithus, ithe istudy icould igo ifor iregression ianalysis.

Tijani, iAdeoye iand iAlaka i(2019) iinvestigated ithe ieffects iof iCSR ion ibanks ifinancial

iperformance iin iNigeria iwith ispecial ireference ito iUnited iBank iof iAfrica i(UBA) iplc.

The idata isourced from annual report. iData idisaggregated iinto ihealth iissue, itransportation

iand ieducation iproxies ion iCSR iand iReturn ion iEquity ias ifinancial iperformance. iThe

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iordinary ileast isquare i(OLS) iestimation itechnique iand igranger- icausality itest iwere

iadopted. iThe ifindings iof ithe istudy isuggest ithat ithere iis iinsignificant irelationship

ibetween iCSR iand ifinancial iperformance. iThe istudy isuggested ithat imanagement ishould

isee icorporate isocial iresponsibly ias ia ibusiness iopportunity ithat iis ibeneficial iin ithe ilong

irun ithereby, iincorporating i icredible iand iwell istructured isocial iresponsibility ipolices.

Asian iand iUche i(2019) iexamined ithe irelationship ibetween iCSR iand ifinancial

iperformance. iThe istudy iwas iconducted iusing icontent ianalysis iand ilogit iregression. iThe

istudy imade iuse iof isecondary idata ifrom ifinancial istatement iof ifirms iquoted ion ithe

iNigeria istock iexchange ifor ia iperiod iof iten iyears. iCorporate isocial iresponsibility iis

imeasured iby iemployee imanagement iand icommunity idevelopment. iFindings iindicate ithat

iROA iand iROCE irelate ipositively iwith iemployee imanagement iand icommunity

idevelopment. iMarket iprice iof ishares ihas inegative irelationship iwith iCSR. iThe istudy ialso

irevealed ithat ifirms iwith ihigher iTobin’s iQ idisclose iCD iinformation iand ilower iEM.

iAlso ifirm igrowth, ifirm isize iand ileverage iare ipositively irelated ito iEM, iROA, iROCE.

Okwoma i(2019) iexamined iCSR iand ifinancial iperformance iin ibanking isector iin iKenya.

iA ilongitudinal iresearch ifor ithe istudy iwas iadopted iby ithe iresearcher. iIn iother ito

imeasure iCSR, ithe iamount ispent ion iCSR iactivities iwere iused iwhereas ifinancial

iperformance iwas imeasured iby ithe icomputation iof ivarious iratios ifor iinstance, iReturn ion

iasset iand iReturn ion iequity. iA imultiple iregression ianalysis iwas icarried iout ito iestablish

ivariable irelationship. iIt iwas iestablished ithat iCSR iactivities ipositively iaffected ifinancial

iperformance iof ibanks ibut ispecifically ilarge iand imedium isized ibanks; ihowever ithere

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iwas ino isignificant iinfluence ion ithe ifinancial iperformance iof ismall ibanking iinstitutions.

iThe istudy iconcluded ithat iengagement iof iCSR iis isound ifor ithe ifinancial ihealth iof

icommercials. I

Folajin, iIbitoye iand iDunsin i(2019) iinvestigate ithe iimpact iof iCorporate iSocial

iResponsibility ion ibank iprofitability iwith iparticular ireference ito iUnited iBank ifor iAfrica

i(UBA) iPlc. iThe istudy iused iannual ireports iof iUnited iBank ifor iAfrica i(UBA) iPlc. iData

iused iinclude icorporate isocial iresponsibility iexpenditure iand iReturn ion iAssets. iData

irelating ito icost/investment/expenditure ias ithe icase imay ibe ifor ithe ibank ion icorporate

isocial iresponsibility iand iprofitability iwas iused ito iconstruct iordinary ileast isquare i(OLS)

imodel iof iregression ito iwhich iwas ianalyzed iusing iSPSS. iResult ishowed ithat iCorporate

iSocial iResponsibility ispending ihas ishort iterm iinverse ieffect ion iNet iProfit ibut iin ithe

ilong irun iit iwill iprovide ibetter ireturns. I

Samuel i(2019) istudied ithe irelationship ibetween iCorporate iSocial iResponsibility i(CSR)

iand icorporate iprofit iby itesting ithe iEnvironmental, iSocial iand iGovernance i(ESG)

iperformance iscore ion ithe ifirm’s iFinancial iPerformance i(FP), ispecifically ifor iKorea

iStock iPrice iIndex i(KOSPI) ilisted ifirms iin ithe iperiod iof i2008 i- i2014. iThree iseparate

iindividual iEnvironmental, iSocial iand iCorporate iGovernance i(ESG) idisclosure iscores

ifrom iBloomberg iwas iused ifor ithe iCRS iproxy imeasure, ias iwell ias ithe iReturn ion

iEquity i(ROE), iMarket-to-Book iRatio i(MBR) iand iStock iReturn ifor ithe iFP imeasures.

iThe istudy ifound ithat ithe iESG idisclosure iscores i(the imeasures iof ienvironmental, isocial,

iand igovernance iresponsibility iperformance) iin ithe iKorean icorporations’ ishows idiversified

25
iresults. iParticularly, ithe ienvironmental iresponsibility iperformance iscore ipresents ia

inegative i(or iU icurve) irelationship iwith iFP, iwhereas ithe igovernance iresponsibility

iperformance iscore ipresents ia ipositive i(or iinverse iU icurve) irelationship iwith iFP. iOn ithe

iother ihand, ithere iis ino iany istatistically isignificant ievidence iof ia irelationship ibetween

ithe isocial iresponsibility iperformance iscore iand iFP.

Isabel, iMercedes, iPedro iand iManuel i(2019) icarried iout ia iresearch ito iexamine ithe ieffect

iof iCSR ion iinnovation iand ifirm iperformance. iThe itarget ipopulation iof ithe istudy iis

iSMEs ifrom ithe iRegion iof iMurcia i(Spain). iThe idata icollection iprocess iwas icarried iout

idirectly iby iCSA iConsultants iCompany ifrom iDecember i2010 ito iFebruary i2011.

iInformation’s iabout ithe ivariables iused ifor ithe istudy iwas icollected ithrough ia

iquestionnaire iaddressed ito ithe icompany’s imangers. iThe iresearchersifound iout ithat iCSR

iconceptualized ias ia imulti-dimensional iappraisal iof ia ifirm’s iresponsibility iperformance

ileads ito iinnovation iand istrong isocial ibenefit.

Giovanni iand iFrancesca iand iMaria i(2019) iexamined ithe iimpact iof ivoluntary idisclosure

iabout icorporate isocial iresponsibility ion ithe ifirm istock iprices iof iItalian ilisted icompanies.

iin iother ito ianalyze iif iit ican isomehow icontribute ito iincrease ithe istock imarket iprices.

iThe isample iof ithe istudy iconsists iof i25 ifirms irealizing iCSR ireport, iexcluding ibank iand

iinsurance. iThe istudy iapplied iregression imodel ito ianalyze idata. iThe iresult ishows ithat

ifirm istock iprices iin iItaly iare inot iaffected iby iCSR ireport ieven iif ifirms ishow ia igreater

iattention ion ithese iissues. iThis isimply imeans iCSR iis irelatively ia inew iissue iin iItaly,

iand imost iinvestors ihave ia ilow idegree iof iperception iof ithe imatter.

26
 CHAPTER iTHREE

RESEARCH iMETHODOLOGY

3.1 i i iResearch iDesign

The iresearch idesign ithat iwas iadopted ifor ithis istudy iis iex-post ifacto iand iit iinvolves

iinvestigating irelationship ibetween itwo ior imore ivariables iwith ithe ihope iof iestablishing

iwhether ieffects iexist ior ino ieffect ibetween ithe ivariables iunder istudy. iThe irationale

ibehind iadopting ithe idesign iis ibecause ithe istudy iis iafter ifinding iwhether ias ia iresult iof

iexpenditure iincurring ion isocietal, ienvironmental iand iemployees iperformance iof ithe ioil

iand igas icompanies isignificantly iimproves ifirm ivalue. i

3.2 Sources and Instrument iof iData iCollection i i

The isecondary isource iof idata icollection iwas iused ito icollect irelevant idata ifor ithe

ianalysis. iData iwill be isourced ifrom ifinancial irecords iand iannual ifinancial istatements iof

ithe icompanies iunder iconsideration. iThe ifinancial istatements iand ifinancial irecords iare

iuseful ibecause iall iperformance iactivities iare idocumented iin ithe iCompanies irecord ibooks

ifor iproper iaccounting iand ireconciliation ipurpose. I

3.3 Research Population, iSample iand iSample

The ipopulation iof ithis istudy iinclude iall ilisted ioil iand igas iCompanies iin iNigeria. iThe

ipopulation icomprise iall iquoted Ioil and Gas iCompanies iin iNigeria ias iat iDecember, i2022.

iThe ipopulation iis12 iwhich iincludes: iCapital ioil iplc, iRakunity ioil, iJapaul iOil iand

27
iMaritime iServices, iSeplat iPetroleum iDevelopment iCompany, iConoil iPlc, iEterna iOil iand

iGas iPlc, iAnino iInternational iPlc, iForte iOil iPlc, iMobile iOil iNigeria iPlc, iMRS iOil iNig.

iPlc, iOando iPlc iand iTotal iNig. iPlc iwhile i9 iwas iused idue ito iinadequate idata ifrom ithe

ithree icompanies.

3.4 Technique ifor iData iAnalysis iand iJustification

The isoftware istatistical ipackage iof iE-view iused iin ianalysing idata iin ithis istudy. iThe

istatistical itool iis ipanel iregression. iThe ilinear iregression ianalysis iwas iused ito idetermine

iwhether ithere iis isignificant ieffect iof icorporate isocial iresponsibility iand ifirm ivalue iof

iquoted ioil iand igas icompanies iin iNigeria. i i i

Model iSpecification i

The isignificant ieffect iof icorporate isocial iresponsibility ion ifirm ivalue iof iquoted ioil iand

igas icompanies iin iNigeria iwas itested iusing istatistical ipanel iregression. iThe ipanel iof

iregression ianalysis iused ito iexamine iwhether ione ivariable iis idependent ion ianother ior ia

icombination iof iother ivariables. iThe istudy iascertained ithe icorrelation ibetween ithe

idependent ivariable iand ithe iindependent ivariables iwith ithe iaid iof icorrelation imatrix

iwhile imulticollinearity iof ithe iindependent ivariables iwill ibe idetermined iby iVariance

iinflation ifactor. iAlso, iheteroskedasticity iof ithe ivariables iwas iassessed iwhile inormality

itest iof ithe ivariables iwas icarried iout iby iresidual ihistogram inormality itest.

A ipanel iregression imodel iemployed ito iestimate ithe ieffect iof icorporate isocial

iresponsibility ion ithe ifirm ivalue iof iquoted ioil iand igas icompanies iin iNigeria iis

iexpressed iin ithis istudy ias ithus: i

TQit = ɑ i+ iß1CDEXPit+ iß2ENVEXPit i+ iß3EMPEXPit+µit

Where:

28
TQ i i i i= iTobins iQ

CDEXP i i i i= iCommunity iDevelopment iExpenditure iof iCSR i i

ENEXP i i i= iEnvironmental iexpenditure iof iCSR

EMEXP i= iEmployees iexpenditure iand iwelfare iof iCSR

ß1 i– iß3 = iparameter iof ithe imodel

ɑ = iIntercept iof ithe imodel

µ = iError iterms i i

Variable iMeasurement

Variables Definition iand iMeasurement

Firm iValue

Tobin’s Iq Tobins iQ=Equity iMarket ivalue iof ia

icompany
Equity iBook ivalue iof ithe ifirm's
iassets.

Corporate iSocial iResponsibility

iMechanism

Community iDevelopment iExpenditure Measured iby ithe iamount ispent ion ihealth,

iwelfare iand iEducation iby ithe ifirms

Environmental iexpenditure Measured iby ithe iamount ispent ion ienergy

iuse, iwater iuse, iemission, iwaste

imanagement, irecycling iexpenditure iby

ithe ifirms.

Employees iexpenditure Measured iby ithe iamount ispent ion istaff

29
 iand iwelfare iexpenditure iby ithe ifirms

3.5 Justification iof iMethods

Data ion icorporate isocial iresponsibility iand ifirm ivalue iof iquoted ioil iand igas icompanies

iin iNigeria iare ialways idocumented iin ithe iaccounting irecords iand ifinancial ibooks iof ithe

iorganizations iand ifinally ipublished iin ithe iannual ireports iand ithe idocument icontained

iTobins iQ. iThe idata iwas ianalyzed iusing ipanel iregression, ipanel iregression iis ithe

iappropriate ifor ipanel idata iand iwas iused iin iprevious istudies iby i(Gujarati iand iporter,

i2009) iand i(Ahmed, i2014) i(The iuse iof ipanel iregression itaken iinto iconsideration ithe

iheterogeneity iof ithe iunits iinto iaccount iby iallowing ifor isubject-specific ivariables.

30
 CHAPTER iFOUR

DATA iPRESENTATION iAND iANALYSIS

4.1 Data iPresentation

The idata ifor ithe istudy iis iattached iin iappendix iA iwhich icomprised iof icorporate

isocial iresponsibility imeasured iwhich iare iexpenditure ion icommunity idevelopment,

ienvironmental iexpenditure iand iexpenditure ion iemployee iand iwelfare iwhile ifirm

ivalue iis imeasure iby iTobins iQ ias iat iyear iend ifor ithe iperiod icovered iin ithe

istudy. iThe ianalysis icarried iout iinclude ithe idescriptive istatistics, icorrelation,

ivariance iinflation ifactor i(VIF) iof ithe iindependent ivariable, iHeteroskedasticity itest

iand iHausman ispecification iresult iand iregression ianalysis. i

4.2 Data Analysis and Interpretation

Table i4.2.1 Descriptive iStatistics

TQ CDEXP ENEXP EMEXP

iMean i0.266609 i56430946 i19893721 i14937359
iMedian i0.240826 i22012334 i7349000. i6167500.
iMaximum i0.529094 618229727 175000000 277065700
iMinimum i0.086518 i100000.0 i150000.0 i40000.00
iStd. iDev. i0.111888 i90998981 i32464259 i32110577
iSkewness i0.644654 i3.453550 i2.687394 i6.378068
iKurtosis i2.700508 i18.72436 i10.55835 i50.98343
iJarque-Bera i6.570032 i1106.113 i322.5638 i9244.232
iProbability i0.037440 i0.000000 i0.000000 i0.000000
iObservations i90 i90 i90 i90
Source: iEview ioutput, i2023

31
Table i4.2.1 irepresents ithe idescriptive istatistics iof ithe iobservation iin ithe idata iset. iThe

itable ishows iminimum ivalues, iMaximum ivalues, iMean iand istandard ideviation ifor ithe

ivariables iTobin’s iQ, iCommunity iDevelopment iExpenditure iof iCSR, iEnvironmental

iexpenditure iof iCSR iand iEmployees iexpenditure iand iwelfare iof iCSR. i

The imean iof ithe iTobin’s iQ iwas i0.266609 iwith icorresponding istandard ideviation iof

i0.111888. iThis iimplies ithat ion ithe iaverage ithe ifirm ivalue iof ioil iand igas icompanies

irepresented iby iTobin’s iwere i26.66%. iIt ifurther ishows ithat ithe imaximum iTobin’s ivalue

iis i52.9% iwhile ithe iminimum ivalue iis i8%.

The imean ivalue iof iCommunity iDevelopment iExpenditure iof iCSR iis i56430946, iwhereas

ithe iminimum ivalues iand iMaximum ivalues iare i100000.0 iand i618229727, iwhich iimplies

ithat isome iselected ioil iand igas icompanies ispend ibelow ithe iaverage iCommunity

iDevelopment iExpenditure iof iCSR. i iThe istandard ideviation isignifies ithat ithe idata

ideviate ifrom iboth isides iof ithe imean ivalue iby i90998981.With irespect ito iEnvironmental

iexpenditure iof iCSR ithe iaverage iexpenditure iis i19893721, iwhile ithe iminimum ivalues

iand iMaximum ivalues iare i150000.0and i175000000. iThe ideviation ifrom ithe imean iof

iEnvironmental iexpenditure iof iCSR ifor ithe icompanies iis i32464259.

Employee’s iexpenditure iand iwelfare iof iCSR imean iis i14937359 iand iit ideviates ifrom

iboth isides iof ithe imean ivalue iby i32110577. iWhile ithe iminimum ivalue i40000.00 iand

ithe iMaximum ivalue iis i277065700 iwhich iimply isome ioil iand igas icompanies ispend

ilittle ion iEmployees iexpenditure iand iwelfare iof iCSR. i

32
Table i4.2.2 Correlation iMatrix

TQ CDEXP ENEXP EMEXP

TQ i1.000000

CDEXP i0.010307 i1.000000

ENEXP i0.303447 i0.499929 i1.000000

EMEXP i0.151866 i0.081211 -0.086942 i1.000000

Source: iEview ioutput, i2023

Table i4.2.2 ishows ithe icorrelation ibetween ithe istudy ivariables. iThe iresult ishows ithat ithe

irelationship ibetween ithe idependent ivariable iTobin’s iQ iand iindependent ivariables iof

iCommunity iDevelopment iExpenditure iof iCSR, iEnvironmental iexpenditure iof iCSR iand

iEmployees iexpenditure iand iwelfare iof iCSR iis ipositive. iThe ivalue iof ithe icorrelation iis

i0.01, i0.30 iand i0.15 irespectively ifor iCommunity iDevelopment iExpenditure iof iCSR,

iEnvironmental iexpenditure iof iCSR iand iEmployees iexpenditure iand iwelfare iof iCSR.

iThe ipositive icorrelation iimplies ithat iasiCommunity iDevelopment iExpenditure iof iCSR,

iEnvironmental iexpenditure iof iCSR iand iEmployees iexpenditure iand iwelfare iof iCSR

iincreases, ithe ifirm ivalue i(Tobin’s iQ) iincreases isimultaneously iand ivice iversa. iOn ithe

iother ihand, iall ithe irelationship ibetween ithe iindependent ivariables iis ilow iand ibelow

i80% iwhich ishows iabsence iof imulti-collinearity.

33
 Table i4.2.6 Summary iof iRegression iResult

Variables Coefficient i t-values P-values

C -0.178085 -1.129472 0.2618

CDEXP -0.028533 -1.857114 0.0667

ENEXP 0.065400 3.603841 0.0005

EMEXP 0.030939 1.988717 0.0499

R2 0.160622

Adj. iR2 0.131341

F-stat. 5.485610

F-sig. 0.001698

Hausman iP-Value 0.5530

Source: iEview ioutput, i2023

The iresult iin iTable i4.2.6 iindicates ithat iabout i16% ivariability iin ifirm ivalue i(Tobin’s iQ)

iis iexplained iby icorporate isocial iresponsibility iexpenditure icaptured iin ithis istudy, iwhile

ithe iremaining i84% iis iexplained iby iother ivariables inot icaptured iin ithis istudy.

4.34I4,3 Test of Hypotheses

It ialso ireveals ithat iCommunity iDevelopment iExpenditure iof iCSR ion ifirm ivalue

i(Tobin’s iQ) iis inegative iand istatistically iinsignificant. iThe icoefficient iis i-0.028533 iand

ithe iP-value iis i0.0667. iA inegative irelationship ithough istatistically iinsignificant, iindicates

ithat iCommunity iDevelopment iExpenditure iof iCSR idecreases ithe ifirm ivalue i(Tobin’s iQ)

34
iof ilisted ioil iand igas icompanies iin iNigeria. iTherefore, ibased ion ithe iabove iresult ithe

istudy ifails ito ireject ithe inull ihypothesis iwhich istates ithat ithat iCommunity iDevelopment

iExpenditure iof iCSR ihas ino isignificant ieffect ion ieffect ion ifirms’ ivalue iof ilisted ioil

iand igas icompanies iin iNigeria.

On ithe iother ihand, iTable i4.2.6 iindicates ithat iEnvironmental iexpenditure iof iCSR ihas ia

ipositive ieffect ion ifirm ivalue i(Tobin’s iQ) iand iis istatistically isignificant. iThe icoefficient

iis i0.065400 iand ithe iP-value iis i0.0005. iA ipositive ieffect iindicates ithat iEnvironmental

iexpenditure iof iCSR iincreases ithe ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand igas

icompanies iin iNigeria. iHence, ibased ion ithe iabove ifinding, ithe istudy irejects ithe inull

ihypothesis iwhich istates ithat iEnvironmental iexpenditure iof iCSR ihas ino isignificant ieffect

ion ieffect ion ifirms’ ivalue iof ilisted ioil iand igas icompanies iin iNigeria.

Furthermore, iTable i4.2.6 ishows ithat iEmployees iexpenditure iand iwelfare iof iCSR ihas ia

ipositive ieffect ion ifirm ivalue i(Tobin’s iQ) iand iis istatistically isignificant. iThe icoefficient

iis i0.030939 iand ithe iP-value iis i0.0499. iA ipositive ieffect iindicates ithat iEmployees

iexpenditure iand iwelfare iof iCSR iincreases ithe ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand

igas icompanies iin iNigeria. iHence, ibased ion ithe iabove ifinding ithe istudy irejects ithe inull

ihypothesis iwhich istates ithat iEmployees iexpenditure iand iwelfare iof iCSR ihas ino

isignificant ieffect ion ieffect ion ifirms’ ivalue iof ilisted ioil iand igas icompanies iin iNigeria.

4.4 Summary and Discussion iof iFindings

The istudy ilooked ito iexamine ithe ieffects iof icorporate isocial iresponsibility iexpenditure ion

ifirm ivalue iof ilisted ioil iand igas icompanies iin iNigeria. iIt ispecifically, isought ito iassess

ithe ieffect of Community iDevelopment iExpenditure iof iCSR, iEnvironmental iexpenditure iof

35
iCSR iand iEmployees iexpenditure iand iwelfare iof iCSR ion ifirm ivalue i(Tobin’s iQ) iof

ilisted ioil iand igas icompanies iin iNigeria.

Therefore, ithe ifinding iof ithe istudy iis ibased ion ithe iformulated ihypotheses, imodels iand

ianalysis icarried iout. iThe iStudy ifound igenerally ithat icorporate isocial iresponsibility

iexpenditure ihas ian ieffect ion ithe ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand igas

icompanies iin iNigeria.

Similarly, ithe istudy ifindings irevealed ithat iCommunity iDevelopment iExpenditure ihas ia

inegative iand iinsignificant ieffect ion ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand igas

icompanies iin iNigeria. iTherefore, iCommunity iDevelopment iExpenditure iis inot ian

iimportant ivariable ithat iaffects ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand igas icompanies

iin iNigeria. iThis istudy iis iin iagreement iwith ithe istudies iof iTijani, iAdeoye, iand iAlaka

i(2017) iand iMubeen iand iArooj i(2014) iand icontradicted ithe ifindings iof iStefan iand

iGeorgeta i(2016), iFodio, iAbu-Abdissamad iand iOba i(2013) iand iPaul iand iOnyema

i(2012).

Furthermore, ithe istudy ifindings ishowed ithat iEnvironmental iexpenditure ihas ia ipositive

iand isignificant ieffect ion ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand igas icompanies iin

iNigeria. iThis iconnotes ithat ihigher iEnvironmental iexpenditure ileads ito ihigher ifirm ivalue

iof ilisted ioil iand igas icompanies iin iNigeria iand ivice iversa. iThis iis iin iline iwith

iGallhofer iand iHaslam, i1997 iargument iwhich isay ihigher ienvironmental iexpenditure iis

ihelpful iin icosts isavings, iavoiding iregulatory iprocesses, iand ifinding inew ibusiness

iopportunities. iThis istudy iis iin iagreement iwith ithe istudies iof iStefan iand iGeorgeta

i(2016), iEsu i(2012) iand iUadiale iand iFagbemi i(2011) iand icontradicted ithe ifindings iof

iFodio, iAbu-Abdissamad iand iOba i(2013) iand iCyrus iand iOyenje i(2013).

36
The ifinding iof ithis istudy ialso irevealed ithat iemployee iand iwelfare iexpenditure ihas ia

ipositive iand isignificant ieffect ion ifirm ivalue i(Tobin’s iQ) iof ilisted ioil iand igas

icompanies iin iNigeria. iThis imeans ithat ihigher iemployee iand iwelfare iexpenditure ileads

ito ihigher ifirm ivalue iof ilisted ioil iand igas icompanies iin iNigeria iand ivice iversa. iThis

istudy iis iin iagreement iwith ithe istudies iof iEmily, iMwalati, iRobert, iMusiega iand

iManiagi i(2014), iChung-Fah iand iHo-Chi i(2012) iand iDupont, iFerauge iand iGiuliano

i(2013) iand icontradicted ithe ifindings iof iServaes iand iTamayo i(2012) iand iTjia iand

iSetiawati i(2012).

37
 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary

The study examined the effects of corporate social responsibility expenditure on firm value of

listed oil and gas companies in Nigeria. Specifically, the study assessed the effect of Community

Development Expenditure, Environmental Expenditure and Employees’ Expenditure/Welfareon

firm value of listed oil and gas companies in Nigeria for 2009 to 2018. Three hypotheses were

formulated for testing each of the hypotheses using panel data extracted from annual financial

reports of the firm on each of the variables over the period of the study.

Furthermore, both conceptual and empirical literature related to the study was reviewed, in the

same way relevant theories related to the study were reviewed. The population of the study

comprised of 9 out of 12 oil and gas companies that have data required for the study throughout

the period 2013- 2022. Multiple regression models were used to estimate the effect of three

explanatory variables of community Development Expenditure, Environmental Expenditure and

Employees’ Expenditure/Welfare.

The result suggested that corporate social responsibility expenditure variables used in the study

have significant effect on firm value. Community Development Expenditure was found to have

no significant effect on explained variables.

5.2 Conclusions

38
The study examined the effects of corporate social responsibility expenditure on firm value of

listed oil and gas companies in Nigeria. Based on the findings of the study, the following

conclusion was drawn.

The study reveals that environmental expenditure and employee and welfare expenditure has

positive significant effect on firm value of listed oil and gas companies in Nigeria, while

community development expenditure has negative insignificant effect on firm value of listed oil

and gas companies in Nigeria.

Based on the above findings, environmental expenditure and employee and welfare expenditure

is an important determinant of firm value of listed oil and gas companies in Nigeria.

The study concludes community development expenditure is not an important determinant of

firm value of listed oil and gas companies in Nigeriafirm value of listed oil and gas companies in

Nigeria. This is due to the negative insignificant effect revealed from by the statistical analysis.

Furthermore, the study concludes that owing to the positive publicity organisation get from being

socially responsible it would invest to get goodwill and improve firm valueof listed oil and gas

companies in Nigeria. In addition, employee and welfare expenditure also improve firm value

owing to the fact that enhanced welfare package and other form of incentives improve employee

skills and productivity, thereby increasing its organisation firm value.

5.3 Recommendations

In line with the findings of the study, the following recommendations were made:

i. Oil and Gas companies should spend on more CSR expenditure that can improve the

corporate firm value and maintain the level of community expenditure or decrease it

because the higher their expenditure on community development, the higher it will

decrease it.

39
 ii. Oil and Gas companies should increase or maintain the size of its environmental

expenditure as leverage to improving the firm’s market value because this will give more

thought to the stakeholders that the firm is also improving their immediate environmental

hence, it will increase more participation by them (stakeholders).

iii. The study also recommends that more training and increased welfare package of

employees of oil and gas companies in Nigeria to increase their productivity, which in

turn improves the firms value.

40
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