Corporate Social Responsibility and Financial Performance among Rural Banks in Ghana: The Role of Competitive Advantage, Access to Capital and Corporate Governance

Abstract

The study examines the linkage between CSR and financial performance through competitive advantage and access to capital and the moderating role played by corporate governance using rural banks as a study case. A sample of 126 rural banks was selected, data on financial performance were collected from the 2019 financial statement whereas data on CSR, competitive advantage, access to capital and corporate governance was collected through the use of questionnaire. The data was analyzed using structural equation modeling and hierarchical regression. The study has shown that, business organizations that practice CSR activities, in-turn, gain a defensible competitive position in their industry which intend gives them access to capital to fund their business strategies, hence having positive impact on their financial performance. This observation, however, depends on the efficiency of their corporate governance practices in the organisation. The study recommends that, the activities of CSR should be integrated as part of the firm’s corporate and business level strategies.