The relationship between corporate social responsibility, environmental investments and financial performance: evidence from manufacturing companies

The primary objective of this research is to ascertain the relationship between corporate social responsibility, environmental investments and financial performance in Nigerian manufacturing firms. The hypotheses are tested on internal environmental investments and external environmental investments on firm's financial performance. It further determines if there is a significant difference between the profitability of environmentally conscious and environmentally non-conscious firms in Nigeria. Descriptive analysis is used to explain the variables applied and panel regression analysis is used to find out if there exists a relationship between internal environmental investments (employee benefits, staff training cost), external environmental investments (donations) and firm's financial performance. The results indicate a positive and significant relationship exists between internal environmental investments and firm's financial performance. It is also found a positive but insignificant relationship between external environmental investments and firm's financial performance. Furthermore, paired samplettests are used to reveal that there was a significant difference between the profitability of environmentally conscious and environmentally non-conscious firms. The finding of this study explains that firms with higher environmental investments have a higher profitability level than environmentally non-conscious firms.