The financial trade-offs of corporate social responsibility: A simultaneous equation approach in the Nigerian context
Bibliographic record
Abstract
We explore the bidirectional relationship between corporate social responsibility (CSR) and firm performance among non-financial firms in Nigeria from 2010 to 2022, addressing the financial trade-offs associated with CSR in an emerging market. Given mixed evidence on CSR’s impact on profitability and the limited research in resource-constrained environments, this study aims to clarify how CSR affects profitability, as measured by return on assets, and vice versa. Employing a simultaneous equation modeling framework, estimated via System Generalized Method of Moments (System GMM), the study addresses endogeneity and heterogeneity to produce robust results. Findings reveal a significant negative impact of CSR disclosure on profitability, implying that CSR may impose immediate costs on firms, reducing short-term returns. Furthermore, lower profitability drives firms to intensify CSR efforts, potentially as a strategic response to enhance reputation and stakeholder support. These results suggest that CSR engagement involves financial trade-offs, with firms balancing short-term costs against long-term reputational benefits, particularly relevant in contexts like Nigeria where CSR lacks regulatory backing. This study offers valuable insights into the CSR-profitability dynamics in an emerging market context, providing actionable information for managers, policymakers, and investors on navigating the complexities of CSR in financially constrained settings.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.002 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one teacher head, not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".