Investments in corporate social responsibilities, disclosure practices and financial performance of international oil companies with investments in Africa

Abstract

The objective of this research is to provide empirical evidence, from the perspective of the developing world, Corporate Social Responsibility (CSR)

activities and practices of Oil Companies with investments in Africa and how

investment in CSR and disclosure of CSR influences the financial

performance of Oil Companies with investments in Africa using accounting

based measures. The study employed a mixed quantitative and qualitative research approach and descriptive research design. Panel data set on CSR investments, financial performance represented by return on assets (ROA),

disclosures of CSR activities and company size (total assets) from the year

2007 to 2017 was analysed using random effects panel data analysis to test the

research hypotheses. Content analysis is performed on the annual reports and

other publications of the oil companies to determine their CSR activities and

practices. The findings showed that multinational oil firms with interest in Africa take all aspects of CSR serious and are at the forefront of CSR as they adhere and comply with international standards and best practices in the area of CSR practices, activities and reporting. This study has also shown that

there is a significant positive relationship between investment in CSR and

financial performance of multinational oil companies with interests in Africa,

but no significant relationship between CSR disclosure and financial performance. The positive influence of CSR on financial performance of multinational oil companies with interests in Africa is the result of the

diligence and consistency that they have attached to CSR over the period of

the study which is yielding dividends in terms of financial performance.