Corporate social responsibility and financial performance in Nigeria: the mediating role of stakeholder influence capacity

Previous studies showed that the level of corporate social responsibility (CSR) disclosure in Nigeria is low and the relationship between CSR and financial performance is inconclusive. Therefore, this study examines the mediating role of stakeholder influence capacity (SIC) in the relationship between (CSR) dimensions (community, employee, investor, customer and supplier relations and environmental concern) and financial performance of listed firms in Nigeria. SIC uses as a mediating role since consistent CSR creates SIC and accumulated stock of SIC will increase the performance of company. Data was collected from the senior management officers at the head office of sampled Nigerian listed firms using a cross-sectional study design. The study utilizes a stratified random sampling technique to select 130 responding firms and questionnaires were distributed and collected based on a single questionnaire per firm. The study collected 99 questionnaires through personal administration method. Partial least square structural equation modelling was used to test the study hypotheses. The study finds that employee, investor and customer relations are important factors for the financial performance of Nigerian listed firms. The findings revealed also that firms' stakeholder influence capacity depend on the degree of community, employee, investor and supplier relations, and an environmental concern of the firm. Interestingly, the result further shows that with a better stakeholder influence capacity stock. community, employee, investor and supplier relations, and environmental concern influence, financial performance of Nigerian firms. The results of the study provide significant input lo Nigerian listed firms, policy makers and researchers that SIC stock could improves the performance of company. The Nigerian listed firms should emphasize on all corporate social responsibility dimensions in order to boost their financial performance. Policy makers should encourage Nigerian listed firms to invest in corporate social responsibility activities for a better profitability.