Mediating Effect of Investment on the Relationship between Corporate Social Responsibility Reporting and Performance of Banks in Nigeria

Abstract

This study examined the mediating effect of investment on the relationship between corporate social responsibility reporting (CSR) and the performance of Deposit Money Banks listed on the Nigeria Exchange Group. CSR was measured using expenditures on donations (donations to IDPs), training and development (training on laundering, fashion designing and information technology) and employee health and safety. The performance measure was the earnings per share (EPS).Using census sampling approach, data were collected from annual reports of 14 Deposit Money Banks (DMB) that were consistently listed on the Nigeria Exchange Group from 2016-2020. The structural equation model was used as a major technique of data analysis. The structural relationship between the variables were estimated in conjunction with the direct, indirect and total effects to ascertain the effect of investment as a mediator on the relationship between CSR reporting and EPS. Findings revealed that within the study period, investment had significant mediating effect on the relationship between CSR reporting and EPS of Deposit Money Banks listed on the Nigeria Exchange Group. It was recommended that corporate social responsibility reporting and its activity is an expenditure but since it was mediated by investment to have positive and significant effect on EPS, deliberate policies should be made by Deposit Money Banks on donations and social skills like training of youth on information technology (IT), laundering and fashion designing as this has the ability to improve the performance of the firm through the mediating role of investment.