CEDTECH International Journal of Management Studies & Entrepreneurial

Development
Volume 4, Number 2, June 2023
http://www.cedtechjournals.org
ISSN: 2756-4576

THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON

FIRMS’ PERFORMANCE AND COMMUNITIES DEVELOPMENT
IN THE NORTN EAST NIGERIA.

Nuhu Otaru Isah

School of Business and Management Technology,
Department of Accounting, The polytechnic, Bali. Taraba state.
Email: Isahnuhu80@gmai.coml

ABSTRACT
The North Eastern Region of Nigeria produces a significant portion of
the aggregate wealth of Nigeria. Since the outbreak of insurgency in 2009,
the region has perennially suffered from environmental destruction,
crumbling infrastructures and services, high unemployment, social
deprivation, abject poverty and endemic conflict. This has led to calls for
companies operating in the North East especially Borno State, Adamawa
State and Yobe State to demonstrate the value of their investments in
Nigeria by undertaking increased community development initiatives that
provides direct social benefits such as local employment, new
infrastructure, schools, and improved health care delivery. This paper will
attempt to examine the impact of corporate social responsibility on firms’
performance and community development in North East, Nigeria. The
paper adopt ex pos facto and survey method data collection. STATA 11
was used as a statistical too. CRS represented by Road Development,
Health Investment and Community Development as independent
variables while PR represented by firms performance as dependent
variable. The study cover a period of five years, 2017 – 2021. The result
document a positive interactions between CSR and firms financial
performance. The research recommends: The government should make
laws and enforce on all companies in Nigeria to invest in corporate social
responsibility and the firms should increase more especially on human
capital development by investing more in educational sector.

Keywords: Corporate Social Responsibility, Community Development

and Firms’ Performance.

INTRODUCTION
Corporate Social Responsibility assumed prominence amongst academics
and strategic thinkers and in a bid to explain Corporate Social
Responsibility as a core business strategy in an atmosphere of relatively

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 CEDTECH International Journal of Management Studies & Entrepreneurial
Development
Volume 4, Number 2, June 2023
http://www.cedtechjournals.org
low interface with law and regulatory framework is being seen as the true
nature of CSR (Nikolay, 2011). According to Crosbie and Knight (2015),
the contemporary attitude of government and stakeholders is on how to
make corporations become more partisan in delivery of social and
environmental development, governments around the world would have
adopted various approaches to engaging companies on CSR in delivering
its social and environmental programme to the public, although some
have implemented measures within the law; like India and Indonesia,
others have tried to developed policies towards reliance on partnership,
for instance in the uk, the government’s interest in corporate social
Responsibility is considered as farsighted one, hence taking account of
their economic social and environmental impacts.

Corporate Social Responsibility in the community develops, incentives to

the employees especially those peculiar cases of volunteering status, are
the additions to our discourse as companies make profit from been more
publicly responsible and it helps to increase huge sales, encourage and
guarantee a committed workforce and increase public trust of the
companies (Lance, 2012). The issue of corporate social responsibility
(CSR) has been debated since 1950s. Latest analyses by Secchi (2007)
and Lee (2008) reported that the definition of CSR has been changing in
meaning and practice. The classical view of CSR was narrowly limited to
philanthropy and then shifted to the emphasis on business-society
relations particularly referring to the contribution that a corporation or
firm provided for solving social problems. In the early twentieth century,
social performance was tied up with market performance. The pioneer of
this view, Oliver Sheldon (1923, cited in Bichta, 2003), however,
encouraged management to take the initiative in raising both ethical
standards and justice in society through the ethic of economizing, i.e.
economize the use of resources under the name of efficient resource
mobilization and usage. By doing so, business creates wealth in society
and provides better standards of living.

The present-day CSR also called corporate responsibility, corporate

citizenship, responsible business and corporate social opportunity) is a
concept whereby business organizations consider the interest of society by
taking responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities and other stakeholders
well as their environment. This obligation shows that organizations have
to comply with legislation and voluntarily take initiatives to improve the

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CEDTECH International Journal of Management Studies & Entrepreneurial
Development
Volume 4, Number 2, June 2023
http://www.cedtechjournals.org
well-being of their employees and their families as well as for the local
community and society at large.

In the forgoing argument, the CSR should be made compulsory to all

companies and it should be an obligatory issues. This article aims to
analyze three theories of CSR namely utilitarian, managerial and
relational in terms of their meaning and practical emphases. These
groups of theories are chosen because they are interdisciplinary in nature
covering aspects of economic system, the managerial aspects of the
corporation and the beneficiaries. The paper then highlights the role of
CSR in community development based on an international perspective
due to the heterogeneity of CSR in its understanding and practices in
various countries of the world. The organization of the article is as
follows: First, theories of CSR are analyzed in order to look at their
emphases of meaning, perspective and approaches. Second, the roles of
CSR are highlighted specifically in community development because the
logic of CSR is towards seeing its impact in community socially,
environmentally and economically. Third, competencies required by CSR
managers are discussed in order to have a better understanding of the
practical aspects of CSR. Finally, conclusions and implications for future
research are drawn.

STATEMENT OF PROBLEM/JUSTIFICATION
In the Nigerian society, Corporate Social Responsibilities (CSR) has been
a highly contemporary and contextual issue to all stakeholders including
the government, the corporate organization itself, and the general public.
The public contended that the payment of taxes and the fulfillment of
other civic rights are enough grounds to have the liberty to take back from
the society in terms of CSR undertaken by other stakeholders. Some
years ago, what characterized the Nigerian society was fragrant pollution
of the air, of the water and of the environment. Most corporate
organizations are concerned about what they can take out of the society,
and de-emphasized the need to give back to the society (their host
communities). This attitude often renders the entire community
uninhabitable. A case in mind is the North East area of Nigeria which had
been devastated by insurgency which resulted into loss of lives,
destruction of homes, unemployment, etc. this translated to negative
integrity and reputation on the part of corporate identity as people
perceived this as exploitation and greed for profitability and wealth
maximization within a decaying economy of Nigeria. However, the

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 CEDTECH International Journal of Management Studies & Entrepreneurial
Development
Volume 4, Number 2, June 2023
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general belief is that both business and society gain when firms actively
strive to be socially responsible; that is, the business organizations gain in
enhanced reputation, while society gain from the social projects executed
by the business organization. In modern day however, having seen the
benefits and average favorable pay-back period of their investment in
CSR, corporations are now seriously involved in this project, which had
impacted in the society wonderfully and profitable. This study is
therefore, intended to consider the impact of corporate social
responsibility, firm performance and community development in the
North East. The perceived gap supposedly created is harnessed and
investigated for possible resolution, using the banking, communication
and manufacturing industries as case study. The research approach is
both descriptive and analytical. Data collected for this study are from both
primary and secondary sources, relying heavily on the relevant
information available from banking, communication and manufacturing
sectors, and other sources.

OBJECTIVE OF THE STUDY

This study explored the unexplored research in CSRs studies, which
include:
1. Assessed the role CSR in helping companies to avert a hostile
reception from host communities in the North East;
2. Examined the CSR and firm performance on community
development in the North East;
3. Suggested how company can improve on CSR to develop the host
communities.

SIGNIFICANCE OF THE STUDY

The result of this study will be of immense contribution to the study of
CSR nationally and internationally, it will increase more awareness to the
companies on the need for effectiveness CSR as a means of societal
development, also the host communities to keep cordial relationship
between them and the firm.

RESEARCH QUESTIONS
The research will specifically address the following research questions:
a. Can corporate social responsibility improve firm performance?
b. Does the community feel the positive impact of development as a
result of CSR by firms?
c. Should firm increase the level of development in your community?

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CEDTECH International Journal of Management Studies & Entrepreneurial
Development
Volume 4, Number 2, June 2023
http://www.cedtechjournals.org
REARCH HYPOTHESES
In order to achieve the purpose of this study, the following hypotheses are
formulated to guide the researcher.
1. There is no positive relationship between the CRS and firm
performance as measured by community development.
2. Community does not feel the impact of firm development
3. Firms does not need to increase the level of development the host
communities.

SCOPE OF THE STUDY

This study focused on the case of high profile companies such as banks,
communication and manufacturing firms in the North Eastern Nigeria to
investigate the impact of corporate social responsibility on firm
performance and community development using both primary and
secondary data.

REVIEW OF RELATED LITERATURE

The literature review is structured as follows: Firstly look into corporate
social responsibility, and secondly theories of corporate social
responsibility, thirdly, the concept of firm performance, fourthly, the
review of corporate social responsibility. In each category, the work will
try to investigate and figure out the role of CSR in societal development
and how it can be improve upon to assist the North East to overcome the
current situation. Corporate Social Responsibility assumed prominence
amongst academics and strategic thinkers and in bid to explain Corporate
Social Responsibility as a core business strategy in an atmosphere of
relatively low interface with law and regulatory framework is being seen as
the true nature of CSR (Nikloy, 2011). According to Crosbie and Knight
(1995), the contemporary attitude of government and stakeholders is on
how to make corporations become more partisan in the delivery of social
and environmental development, governments around the world have
adopted various approaches to engaging companies on CSR in delivering
it social and environmental programme to the public, although some have
implemented measures within the law. Corporate Social Responsibility in
the community developments, incentives to employees especially those
peculiar cases of volunteering status, are the additions to our discourse as
companies make profit from been more publicly responsible and helps to
increase huge sales, encourage and guarantee a committed workforce and
increase public trust of the companies (Lance, 2012).

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 CEDTECH International Journal of Management Studies & Entrepreneurial
Development
Volume 4, Number 2, June 2023
http://www.cedtechjournals.org
The issue of corporate social responsibility has been debated since 1950s.
Latest analyses by Secchi (2007) and Lee (2008) reported that the
definition of CSR has been changing in meaning and practice. The
classical view of CSR was narrowly limited to philanthropy and then
shifted to the emphasis on business-society relations particularly referring
to the combination that a corporation or firm provided for solving social
problems. In the early twentieth century, social performance was tied up
with market performance. The pioneer of this view, Oliver Sheldon
(1923, cited in Bichta, 2003), however, encouraged management to take
the initiative in raising both ethical standards and justice in society through
the ethic of economizing, i.e. economize the use of resources under the
name of efficient resource mobilization and usage. By doing so, business
creates wealth in society and provides better standards of living.

The present-day CSR (also called corporate responsibility, corporate

citizenship, responsible business and corporate social opportunity) is a
concept whereby business organizations consider the interest of society by
taking responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities and other stakeholders
as well as their environment. This obligation shows that organizations
have comply with legislation and voluntarily take initiatives to improve the
well-being of their employees and their families as well as for the local
communities and society at large. CSR simply refers to strategies
corporations or firms conduct their business in a way that is ethical and
society friendly. CSR can involve a range of activities such as working in
partnership with local communities, socially sensitive investment,
developing relationships with employees, customers and their families,
and involving in activities for environmental conservation and
sustainability. This article aims to analyze three theories of CSR namely
utilitarian, managerial and relational in terms of their meaning and
practical emphasis. These groups of theories are chosen because they are
interdisciplinary in nature covering aspects of economic system, the
managerial aspects of the corporation and the beneficiaries. The paper
then highlights the role of CSR in community development based on an
international perspective due to the heterogeneity of CSR in its
understanding and practices in various countries of the world. The
organization of the article is as follows/; first, theories of CSR are analyzed
in order to look at their emphases of meaning, perspective, and
approaches. Second, the roles of CSR are highlighted specifically in
community development because the very logic of CSR is toward seeing

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CEDTECH International Journal of Management Studies & Entrepreneurial
Development
Volume 4, Number 2, June 2023
http://www.cedtechjournals.org
its impact in community socially, environmentally and economically.
Third, competencies required by CSR managers are discussed in order to
have a better understanding of the practical aspects of CSR. Finally,
conclusions and implication for future research are drawn.

THEORY OF CSR
Utilitarian Theories
In the utilitarian theories the corporation serves as a part of the economic
system in which the function is mechanical i.e. traditionally known as in
profit maximization. CSR ideas emerged after a realization that there is a
need for an economics of responsibility, embedded in the business ethics
of a corporation. Hence, the old idea of laissez faire business gives way to
determinism, individualism to public control, and personal responsibility
to social responsibility. Utilitarian could also be taken synonymously with
instrumental theories (Garriga and Mele, 2004; Jensen, 2002) in which
the corporation is seen as only an instrument for wealth creation, and its
social activities are only a means to achieve economic results.
Instrumental theories were also based on the basic idea about investment
in a local community in which Friedman (1970) strongly stated earlier that
the investment will be in long run provide resources and amenities for the
livelihoods of the people in the community.

The utilitarian theories are related to strategies for competitive

advantages. The proponents of these theories are, for instance, Porter and
Cramer (2002) and Litz (1996) who viewed the theories as bases for
formulating strategies in the dynamic usage of natural resources of the
corporation for competitive advantages. The strategies also include
altruistic activities that are socially recognized as instrument for marketing.
Secchi (2007) further divides the utilitarian group of theories into two,
namely, the social costs of the corporation and the idea of functionalism.
The social cost theory has a basis for CSR in which the socio-economic
system in the community is said to be influenced by the corporate non-
economic forces. It is also called instrumental theory (Garriga and Mele,
2004) because it is understood that CSR as a mere means to the end,
which leads to the fact that the social power of the corporation is
materialized specifically in its political relationship with society. The
utilitarian theory therefore, suggest that the corporation needs to accept
social duties and rights to participate in social co-operation. Within it, the
functionalist theory, specifically advocates that the corporation is seen as a
part of the economic system, which one of the goals is profit making. The

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 CEDTECH International Journal of Management Studies & Entrepreneurial
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Volume 4, Number 2, June 2023
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firm is viewed as an investment, and investment should be profitable to
the investors and stakeholders. Putting it from the internal point of view
of the firm, CSR was coined as a defense tactic of the industrial system
against external attacks because these needs a balance between profit
making and social objectives for the economic system’s equilibrium.

Managerial Theory
Secchi (2007) analysis stresses the logic of managerial theory that
emphasizes corporate management in which CSR are approached by the
corporation internally. This makes the difference between utilitarian and
managerial perspective of CSR. This suggests that everything external to
the corporation is taken into account for organizational decision making.
Managerial theories have been divided into three sub-groups: 1. corporate
social performance (CSP); 2. Social accountability, auditing and reporting
(SAAR), and 3. Social responsibility for multinationals. CSP aims to
measure the contribution the social variable makes to economic
performance. Thus, the problem is that of managing the firm considering
social and economic factors together. It is based on the assumption that
business depends on society for growth and sustainability.

CSP of a corporation is further sub-divided into five dimensions in order

to keep detailed information about its existence in the corporate chains:
1. Centrality measures the way CSR is compatible with mission of the
core goals; 2. Specificity gauges the advantages CSR brings to the
corporation; 3. Pro-activity that measures the degree of reaction to
external demands; 4. Voluntarism that accounts for discretion the firm in
implementing CSR; and 5. Visibility refers to the way the responsibility
behavior is perceived by community of stakeholders. As conclusion, the
managerial theory generates interests in the sense that CSR considers
social-economic variables to measure firms’ socio-economic performance,
as well as to link social responsibility ideology to business strategy.

Secchi (2005) further elaborates that SAAR are strictly related to social
performance contributions through accounting, auditing and reporting
procedures. SAAR means a firm accounts for its action. By doing so,
firms are controlled a d regulated in their actions towards responsible to
the relevant community.

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Relational Theory
Relational theory has a root from the complex firm-environment
relationships. As the term implies, interrelations between the two are
focus of the analysis of CSR. Relational theory is further divided into four
sub-groups of theories: 1. Business and society; 2. Stakeholder approach;
3. Corporate citizenship; and 4. Social contract. Business and society is
proposed to mean ‘business in society’ in which CSR emerges as a matter
of interaction between the two entities. One of the measures of CSR is the
development of economic values in a society. Another is a person’s
obligation to consider the effects of his decision and action on the whole
social system. Stated in the form of a general relationship, social
responsibilities of businessmen need to reflect the amount of social power
they have. Stakeholder approach has been developed as one of the
strategies in improving the management of the firm. It is also said as a way
to understand reality in order to manage the socially responsible behavior
of a firm. The stakeholder approach further considers a firm as an
interconnected web of different interests where self-creation and
community creation happen interpedently; and individuals behave
altruistically.

Based on Garriga and Mele (2004) analysis, stakeholder approach is both

within the integrative and ethical theories, where the former emphasizes
the integration of social demands and the latter focuses on the right thing
to achieve a good society. These are supported by the work of Mitchel,
Agle and Wood (1997) where balances among the interests of the
stakeholders are the emphases; and the work of the Freeman and Phillips
(2002) that considers fiduciary duties towards stakeholder of the firms,
respectively.

Conclusions about the three groups of CSR theories are as follows:

Utilitarian is simplified in its views by the individuals and mechanical
from the corporation perspective, managerial is very organizational
oriented and measurable; and relational is values-based as well as
interdependent between the corporation and society. The allocation of
responsibility according to the order of the theories is economic system,
the corporation and the type of the relationship.
This conclusion is further strengthened by another not-so-distant
conceptualization about CSR in that the theories are grouped into
instrumental, political, integrative and value based. Instrumental theory is
focusing on achieving economic objectives through social activities;

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political focusing on a responsible use of business power in the political
arena; integrative concentrating on drawing together management issues,
public responsibility, stakeholder management and corporate social
performance; and ethical theory is emphasizing strategies to achieve a
good society

CONCEPT OF FIRM PERFORMANCE

In business, the analysis of performance whether financial, production,
marketing (even managerial), or general activity is very necessary because
the outcome of the very present decisions lie in the projection of the
future. This however, begins with the evaluation of the past prevailing
situation with a view to establish a basis for future projection. Principally,
the unit evaluated is the organization seeking to make decisions, but this is
often not done in isolation. Firms compete for the use of resources, the
action of each firm; invariably have implication for decision and actions of
others. Thus business analysis or performance appraisal or evaluation or
merit rating usually expand to include literally all activities of the firm
including competition.

The concept of performance therefore cuts across all spheres of

operation within and outside the organization. For this reason, many
scholars have viewed it differently. Some have expressed it in terms of
material resources utilization. For instance, when a person aids or
behaves in an expected or beyond expectation, such a person is said to
have performed well or creditably well. Similarly, when equipment is
serving its purpose without a fault, the equipment is acclaimed to be of
good performance. However, from which angle it is viewed, there are two
elements and two faults in performance viz: the “target and actual
accomplishment” and effectiveness and efficiency, Osaze and Annao
(1990). Similarly, the four major areas of performance customarily
investigated, as noted by Osaze and Annoa are profitability, liquidity
leverage (long-term solvency) and activity (efficiency of expirations).
Again, the focus in each situation depends on who is carrying out the
evaluation and for what purpose. Available literatures envies that most
writers and researchers have not bothered to proffer a concise definition
of the term performance. According to Uboh (2005), performance can be
grouped into two basic types; those that relate to results, output or
outcomes such as competitiveness, profit and those that focus on
determinants of results such as prices or products. Curristine (2005:37) in
Ilesanmi (2011) defines performance as “the yield or results of activities

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CEDTECH International Journal of Management Studies & Entrepreneurial
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carried out in relation to the purposes being pursued. Its objective is to
strengthen the degree to which organization achieve their purposes”.

Davis and Olison (1985), it is usually the past that can realistically be
expected rather than what is desired. Thus target performance is the
desired, or in the other way the expected. There are however, situations
where, in practice target may not have been expressly set but only a vague
notion is held as to what is expedient. Actual result (performance), on the
other hand is the outcome of the firms won effort during a specified
period, Osaze and Annao (1990); or what is realized or against what
actual accomplishment would enable one to adjudge performance as
being either satisfactory or unsatisfactory. Aluko (2003), view
performance as the execution or accomplishment of work, tasks or goals
to a certain level of desired satisfaction and that organizational
performance is defined in terms of the ability of an organization to satisfy
the desired expectations of three main stakeholders comprising of
owners, employees and customers.

Also, Meyer and Zucker (1989:111) argue that generally, performance is

defined narrowly to the extent that (a) elites dominate an organization, (b)
a high degree of professionalization exists, and (c) the organization
performs a technical function, outputs of which are measurable.
Performance may be construed much more broadly, by contrast, to the
extent that (a) the norm of participative democratic governance operates,
sometimes in the formal structure or rules of an organization, (b) the
interests of multiple constituencies are given recognition, and (c) the
organization’s function is non-technical and outputs elude measurement.

Performance is the “use for decision making”, “satisfaction” with the

costing system, perceived “financial benefits”- a dichotomous measure
with no reference to the criteria of benefit, or “other non-financial
benefits” (Cagwin&Browman, 2002:3). In addition, organizational
performance as observe by Kohli&Jaworski (1996) consists of cost-based
performance measures, which reflect performance after accounting for
the costs of implementing a strategy (profit measures), and revenue-based
performance measures, which do not account for the cost of
implementing a strategy (sales and market share). Macrì,
Silvi&Tagliaventi (2002) opined that business performance is the systemic
result of the complex interplay of performance of single organizational
units and that business performance is achieved through the contribution

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of internal organizational units and external actors. The “quality” of these
contributions affects the performance of the business units that receive
them and therefore the overall business performance.

Dauda (2010) highlighted that organization performance is determined by

the demand for its product or services. Many organization put in place
methods and strategies that could enabled them attract customers and
improved the quality and quantity of their product. Mates, Iancu&Cosma
(n.d.)posit thatcompany’s performance reflects its capacity of generating
future cash-flows, by using existing resources, and the efficiency level in
using new resources. The capacity of generating future cash-flows assumes
that the company would have to book revenues of its activity, and the use
of the existent resources needs a detailed overview of the expenses of the
period. The revenues and expenses are elements strictly tied to the
evaluation process of the company’s performance. However, from the
above definitions it can be seen that, performance in business setting
means the extent of which set objectives has being or is being met. This
implies that the resultant outcome of the firm’s effort in derivatives as well
as those aspects of the firm’s cultures which indicates its ability to survive
or its disposition to avail itself of further opportunities.

CONCEPT OF COMMUNITY DEVELOPMENT

First of all community is generally defined as a group of people sharing a
common purpose, who are interdependent for the fulfillment of certain
needs, who live in close proximity and interact on a regular basis. There
are shared expectations for all members of the group and responsibility
taken from those expectations. The group is respectful and considerate of
the individuality of other persons within the community. In a community
there is a sense of community which is defined as the feelings of
cooperation, of commitment to the group welfare, of willingness to
communicate openly, and of responsibility to and for others as well as to
one’s self. Most important there exists community leaders who are
responsible for the success of any community event, depending on the
needs of the community, and the individual’s own feelings. The
community leaders are individuals who strive to influence others to take
responsibility for their actions, their achievements, and the community
welfare. Community development (CD) refers to initiatives undertaken by
community with partnership with external organizations or corporation to
empower individuals and groups of people by providing these groups with
the skills they need to effect change in their own communities. These

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skills are often concentrated around making use of local resources and
building political power through the formation of large social groups
working for a common agenda. Community developers must understand
both how to work with individuals and how to affect communities’
positions within the context of larger social institutions. CD is the process
of developing active and sustainable communities based on social justice
and mutual respect. It is about influencing power structures to remove the
barriers that prevent people from participating in the issues that affect
their lives.

Community workers facilitate the participation of people in this process.

They enable linkages to be made between communities and with the
development of wider policies and programs. CD expresses values of
fairness, equality, accountability, opportunity, choice, participation,
mutuality, reciprocity and continuous learning. Educating, enabling and
empowering are at the core of CD (Federation of Community
Development Learning, 2009). CD is the combined processes, programs,
strategies, and activities that make a community sustainable as compared
to economic development which is the marketing of its potential for
growth followed by local efforts to act on opportunities. The entire set of
approaches to community development practice may be considered a
specialized form addressing, coordinating and building the social
infrastructure at a location. CD may be defined as a process of
challenging the undesirable and unacceptable disparity of conditions and
infrastructure that negatively affect the quality of life in a place where
people live and work. It functions best as process in locations where all
strata of society and citizenry are engaged with sense of community
solidarity (Community Glossary, 2009). The widely used meaning of CD
is the one given by the United Nations (United Nations, 1971) in which
CD is an organized effort of individuals in a community conducted in
such a way to help solve community problems with a minimum help from
external organizations. External organizations include government and
non-government organizations, and corporations of various types and
sizes such as small and medium enterprises (SMEs) and multinational
corporations (MNCs). The implication of UN’s definition of CD is,
therefore, emphasizing creativity and self-reliance in the community for
short and long term goals, but not to defy the CSR roles of the various
types of business firms. In relation to the people, the definition of CD is
essentially both an educational and organizational process. Another term
closely related to CD is community work, which is about the active

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involvement of people in the issues that affect their lives and focuses on
the relation between individuals and groups and the institutions which
shape their everyday experience. It is a developmental process that is both
a collective and individual experience. It is based on a commitment to
equal partnership between all those involved to enable a sharing of skills,
awareness, knowledge and experience in order to bring about change. It
takes place in both neighborhoods and communities of interest, whenever
people come together to identify what is relevant to them and act on
issues of common concern. The key purpose is to work with
communities experiencing disadvantage, to enable them to collectively
identify needs and rights, clarify objectives and take action to meet these
within a democratic framework which respects the needs and rights of
others. Community work recognizes the need to celebrate diversity and
appreciate differences among ethnic and social groups in the community.

EMPIRICAL REVIEW
Empirically, Oyetunde and Akande(2014) in their paper examine the
factor of Corporate Social Responsibility and its relationship with societal
perception and expectation. The study is a measurement of the disparity
between what Lafarge Cement Nigeria Plc Ewekoro feels is her CSRA
and what the Ewekoro Community expects from the companies. One
thousand two hundred questionnaires administered and distributed to
resident of the company area. Data collected were analyzed using
percentage analysis and hypothesis tested through Z score statistics at
0.5% significance. The result of the findings revealed the positive
influence of CSR on promoting peace and harmony in the host
community of an organization and thus reducing attendant societal
menaces. The paper recommends that host communities should be
involved in CSR plan so that projects are designed according to the need
of the community and ensure the cooperate with the companies operating
in their area to achieve the objectives of CAR ti its fullest sense through
amicable presentation of grievances.

Empirically, Abdulkadir, Abdulmalik and Shaibu (2022) in their paper

attempts to investigate the impact of corporate social responsibility on the
development of the host communities of cement manufacturing
companies in Nigeria. The paper restricted its research to the impact of
CSR on the community’s human and health services and educational
development. A sample of 360 respondents across demography was taken
from the population of 2 communities. The study which employed the

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chi-square method of data analysis to test the hypotheses, determined that
CSR has significant influence on the development of human health and
services and educational development of the host communities of cement
companies in Nigeria. Companies that participates in local community
development, such as providing services and infrastructures and assisting
projects, builds trusts and increase their profitability

Ebeneze and Mercy (2022), examined the effect of corporate social

responsibility on the development of host community of selected
manufacturing firms in South West, Nigeria. The study employed a
descriptive research design and the data for the study were collected
through the administration of structured questionnaire. The population of
the study consisted of 515 employees of International Brewery Plc Ilesa
of which 183 were senior and management staff; Nigeria Brewery plc
Ibadan with a total population of 490, of which 165 were senior and
management staff and Guinness Nigeria Plc with a total population of
580, of which 210 were senior and management staff. Stratified sampling
technique was used to arrive at the sample size for the study. The Taro
Yamane (1973) formula was use to arrive at a sample size of 304. A total
of 304 copies of the questionnaire were administered on the respondents,
out of which 255 were retrieved and analyzed. Regression and
Correlation Analyses were employed in analyzing the data collected.
Findings of the study revealed a positive relationship between corporate
social responsibility and development of host community. The study
concluded that corporate organizations that engage in philanthropic
activities such as corporate social responsibility enjoy a sense of
satisfaction and/or fulfillment by benefiting other people and developing
the host community. The study recommended that corporate entities
should adopt the practice of corporate social responsibility by developing
their host communities, employing people, creating jobs and advancing
skill development.

Touitou and Helen (2019) empirically examines the relevance of

corporate social responsibility and community relations on national
development in this 21 century in Nigeria. The paper employed empirical
secondary data, and adopted corporate social responsibility theory and
development communication theory. The finding of the study emphasizes
that, it is evident to corporal bodies that unless there is conducive
atmosphere in their locations, they cannot operate successfully. And
recommends that the company official should understand the geo-

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political, geo-economic and geo-social behaviors of the community
concerned, in order to foster harmonious co-existence.

Ahmad, Hajah and Muhammad (2020) in their paper examine the effect
of CSR on community development. The paper adopts a library based
research methodology focusing mainly on primary and secondary
sources. The result of the paper shows that the traditional view of
business being essentially to maximize profit has changed in recent years.
The traditional view is no longer accepted in today’s business
environment. Corporations have now adopted the concept of CSR, which
is concerned with economic, environment, and social performance. The
paper concludes that the effect of CSR on community development can
be seen from different angles like protecting the environment. Some of
the world’s largest companies have made a highly visible commitment to
CSR, for example, with initiatives aimed at reducing their environmental
footprint.

Empirically, Adnan, Aleem and Hande (2019) delves into Corporate

Social Responsibility (CSR) activities of business organisations operating
in Ghana. Specifically, it looks at how CSR initiatives of sampled
companies contribute to community development (CD). To attain this
aim, both quantitative and qualitative research approaches were adopted.
The purposive sampling technique was used to select companies
operating in three main sectors of the economy. Secondary data sources
such as companies’ periodicals, annual reports, websites, newspapers and
publications by government agencies were used. The findings of the study
reveal that the selected companies engaged in various forms of CSR
activities that contribute to CD. There general focus of these companies is
on education, health and people empowerment. It is recommended that
stakeholders’ engagement needs to be fully practised in the course of CSR
implementation

Joe and Kechi (2013) empirically wrote in their paper titled Implication of
Corporate Social Responsibility for the Performance of Nigerian Firms.
The study used an inferential research design, a cross-sectional study was
carried out to test the effect of CSR, represented by the cost of corporate
social performance variables of waste movement, pollution, abatement,
social action and fines and penalties on the financial performance of
firms, measured by return on capital employed. It was found that waste
management and pollution abatement are both significantly and positively

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associated with performance, while social action and fines and penalties
are strongly, but negatively related. Based on these mixed results, they
recommend that firms should actively invest in proper waste management
and abatement, while social action should be approached with caution,
and effective disclosure policies and practices put in place in order to
avoid or eliminate liabilities of fines and penalties for environmental
infractions.

Further, Hakeem (2014) examines the concept of Corporate Social

Responsibility that is, how companies manage their oil exploration and
business processes to produce an overall positive impact on society. It
reviews the evolution and growth of the CSR concept under international
law and the key institutions that have spearheaded this growth. Since the
emergence of the CSR concept in Nigeria, it has been espoused mainly as
an optional and non-obligatory responsibility for oil companies.

Ojenike, Odunsi, and Atunbi (2014) in their paper titled perception of

corporate social responsibility in Nigeria: An empirical investigation. This
study examines perceptions and attitudes of business leaders towards
corporate social responsibility. Using random sampling procedure,
primary data were collected from 500 business leaders across three
different states of Southwest, Nigeria. The questionnaires were structured
to elicit information on perceptions of what CSR entails. Results show
that perceptions of what constitute CSR spans economic, legal, ethical
and philanthropic responsibilities. Findings suggest that businesses should
uphold these responsibilities in their quest to fulfill their corporate social
responsibility. In the same vain, Eni and Kevin (2018) in their paper
towards integrating corporate social responsibility in Nigeria
environmental and social sector as a panacea for curbing infrastructural
deficit. The paper examined the meaning of CSR in relation to
governance and development. It explored CSR as mechanism for
community development and growth from the standpoint that a
company’s influence on the public is not limited to the economics of
making returns for investment alone, but entails fair labour relations,
totality of social services in host community and sustainable
environmental practices.

In the study of Udoikah (2016) title community development and

corporate social responsibility in Ebonyi state, study examine the activities
of mining firms in Ebonyi State on the development of their host

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communities. The study is anchored on Edward Freeman’s stakeholders’
theory of 1948. The study adopted a descriptive survey design with a
variety of qualitative research methods. The paper then discusses the role
of CSR in community. Competencies required by CSR managers are also
analyzed in order to have a better understanding of the practical aspect of
CSR. Effective partnership between managers of mining corporations and
community leaders was recommended as the basic measure to solve the
lingering problem between Mining Corporation and host communities in
the state.

Empirically, Babalola (2012) examines the relationship between

corporate governance and social responsibility and firms’ profitability in
Nigeria with the use of secondary data, sourced from 10 randomly
selected firms’ annual report and financial summary between “1999-
2008). The study makes use of ordinary least square for the analysis of
collected data. Findings from the analysis show that the sample firms
invested less than ten percent of their annual profit to social
responsibility. The co-efficient of determination of the result obtained
shows the depicts that the explanatory variable account for changes or
variations in selected firms performance (PAT) are caused by changes in
corporate social responsibility in Nigeria.

Adeyanju (2012) in his paper title an assessment of the impact of

corporate social responsibility on Nigerian society: The examples of
banking and communication industries. The study considered the
imperative and benefits of CSR on the Nigerian society. The perceived
gap supposedly created is harnessed and investigated for possible
resolution, using the banking and communication industries as a case
study. The research approach is both descriptive and analytical. Data
collected the study is from both primary and secondary sources, relying
heavily on the relevant information available from both banking and
communication sectors, and other sources. The result reveals a strong
significant relationship between CSR and societal progress.

Further, Godwin (2012) in his study community perception and oil

companies corporate social responsibility initiative in the Niger Delta.
The paper assesses rather selectively the oil companies CSR as an anti-
conflict strategy for development mainly from the viewpoint on Niger
Delta residents. The research assesses how commitment in social
investment seems to conflict with managing negative impact of oil

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production on host communities and their livelihoods. The paper
suggests that CSR is only coincidental to community development.

David (2012) in his paper examines the community expectations of CSR

and the influence of the traditional, political, and administrative systems
on community expectations of CSR in the Niger Delta. The finding shows
that community expectations were framed through the lens of
underdevelopment and its implications for social and economic wellbeing
of the indigenes.

Igbara, Etu, Alobari and Naenwi (2014) evaluate CSR of oil companies
and its role in community development projects in Rivers State, Nigeria.
Data was collected using a four-point likert type scale questionnaire
administered on 230 respondents drawn from 10 oil producing
communities selected through simple random sampling techniques.
Simple percentage and mean scores were used. The findings showed
among others that for any developmental programs and projects to be
considered satisfactory in the study area, it has to take the priotized needs
of the host community into cognizance.

METHODLOGY
Description of study area: The area for this research work will be the
entire North Eastern part of Nigeria where indigenous companies
operating in the axis will be the population of the study. A sample of
multiple companies will be considered for the study

RESEARCH DESIGN
Ex-poste factor and survey research designs were employed.

SAMPLE OF THE STUDY

The sample of the study was obtained from telecommunication firms,
banks and private firms in Adamawa, Borno and Yobe State. The firms
from telecommunication are MTN Nigeria, Glo Nigeria and Airtel
Nigeria. From the banking sector the following commercial banks was
selected. They are First Bank Nigeria Plc, United Bank for Africa and
Union Bank of Nigeria. On the private firms, the study selected the
following firms, ABTI American University Of Nigeria, Ooando Major
Oil distribution, and silvery major oil distributions. The study covered a
period of five years of which financial statement of the above mentioned
firms was extracted within the period of 2017 to 2021. The staff of the

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above mentioned firms were engaged including some residents of the
community of the three states. The firms were grouped into three
categories. Financial firms, oil firms and private firms.

METHOD OF DATA COLLECTION

The method of data collection were both primary and secondary through
the annual report of the sample firms, journals, uses of questionnaires,
interview methods relying heavily on the relevant information available
from banking, communication and manufacturing sectors.

The Variables of the Study and their Measurement

This study used two set of variables: dependent and explanatory variables

The Dependent Variable

PR (ROE): It shows the relationship between net profit available to equity
shareholders and the amount of capital invested by them. Mathematically,
ROE = Profit after tax/shareholders equity as used by Igbara, Etu, Alobari
and Naenwi, (2014)

Independent variables
RD: This is the proportion of amount invested in road constructions for
the community which is measured as proportion of amount invested in
road to total earnings as used by Adeyanju, (2012).
HE = The proportion of amount on money invested in the health for the
community. It is measured by dividing the total amount invested in the
health by the total earnings available to the companies as used by Eni and
Kevin, (2018).
CD: It the community development which is the average of all the
dependant variable and independent variables as used by Eni and Kevin,
(2018).

Control variables: The control variable is;

Firm size: Total asset is the proxy for the firm size.
Model specification

In determining the relationship between corporate social responsibility

dividend and firm performance and community development in north
east Nigeria, two simple models stated in general form estimated are as
follows: as used by Eni and Kevin, (2018).
PR = f (RD, HE, CD)… ………. (1)

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These equations will be represented in econometric form as stated as
follows:

PREit = β0 + β1RDit, + HEβ2 + CDβ3it + FSβ4it + ei ……. (2)

Where; PR is profit of the firms

RD = Road development
HE = Health
CD = Community development
FS = represents the control variables, which are firm size (SIZE) DPR is
Dividend Payout Ratio

β1, β2,and β3 represent coefficients of parameter estimates.

β0is constant

eit and μit are the error terms, which account for other possible factors
that could influence but

not included in the models.

METHOD OF DATA ANALYSIS

Two methods of data analysis were used. First the uses of regression and
correlation method of analysis with the help of STATA statistical tool.
Second, is the uses of percentage method to analyze the questionnaires
administered. The research approach will be both descriptive and
analytical.

DATA ANALYIS, PRESENTATION AND INTERPRETATION

Results and Discussion
Table 1: Multicollinearity Test
Variable VIF 1/VIF(TV)
RD 1.27 0.789254
HE 1.19 0.836873
CD 1.15 0.870915
FS 1.10 0.910104
Mean VIF 1.18
Source: out of VIF developed by researcher using STATA 11 (2023)

The two common ways to check for the presence of Multicollinearity

between independent variables are correlation coefficients and variance

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inflation factors (VIF) with tolerant values. This study used VIF to check
whether the explanatory variables of the model suffer from
Multicollinearity. The VIF in excess of 10 should be taken as an
indication of harmful Multicollinearity (Neter, Wasserman &Kutner
1989, and Gujarati 2003), and the result of the test show that the
maximum VIF is 1.27 and the minimum VIFis 1.10 and this is less than
10 which indicate absence of Multicollinearity.

Table 2: Descriptive statistics

Variables Observation Mean Std.dev Min Max
PR 15 8.613153 4.310733 -.11 16.01
RD 15 .6002 .0314397 .563 .625
HE 15 8.6568 4.367868 -.11 16.31
CD 15 5.895333 2.892226 .11 10.96
FS 15 16.04667 .8330724 14.98 18.32
Source: Output of summary statistics developed by research using
STATA 11 (2023)

Table 2, the mean total firm profit for the sampled oil firms in north east
Nigeria shows an average of 8.613. This means that firms in the north
eastern Nigeria profit is over 8.6 million naira. This shows element of
high level of business doing well in the region, with a minimum of over -
.11 million naira and maximum of over 16 million naira. The standard
deviation of 4.31 indicates that there is no significant variation in profit
between the sampled oil companies during the period of the study. As
indicated in the Table 4.1, the mean .60 which represent 60%. An
indication that 60 % of the sampled firms are committed in road
development, with minimum of 56% and maximum of 62%. The
standard deviation of .031 shows that there is significant variation in the
amount used by the sampled firms for road development. On the
average, health development is 8.65 which represent 6.65 million. An
indication that 6 million were invested by the sampled firms in the north
east on the average with the minimum and maximum of -.11 and 16
million naira respectively. The standard deviation is 4 which shows no
significant variation about investment in health. The average of
community development is 5.8 which represent over 5.8 million naira
and indication that the level of community development is encouraging
with the minimum of .11million naira and maximum of 10.9 million
naira. The standard deviation is 2.8. This indicates no high level of
dispersion. Firm size, measured by the natural logarithm of total assets
has a mean of about 16.4, with a minimum of about 14.98 and maximum

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of about of 18.32. But the standard deviation of 0.833 suggests a high
level of dispersion in the total assets among the sampled companies.

Table 3: Correlation matrix

PR RD HE CD FS
PR 1.000
RD 0.0832 1.000
HE 0.9994 0.0667 1.000
CD 0.9962 0.0600 0.9957 1.000
FS 0.092 -0.7321 0.1032 0.0984 1.000
Source: Correlation output developed by researcher using STATA 11
(2023)

Table 3 shows the correlation coefficients on the relationship between the

dependent variable (PR) and explanatory variables road development,
health, community development, and firm size). The values of the
correlation coefficient range from -1 to 1. The sign of the correlation
coefficient indicates the direction of the relationship (positive or negative),
the absolute value of the correlation coefficient indicates the strength, with
larger values indicating stronger relationships. The correlation coefficients
on the main diagonal are 1.0, because each variable has a perfect positive
linear relationship with itself. As shown in table 3, the relationship
between all dependent variable and independent variables are positive
except relationship between firm size and road development that is
negative with the value of -0.7321. All other relationships are positive and
strong.

Table 4: Regression results

TVD COEFF STD. ERRORS T VALUE PROB
RD 4.466499 1.990453 2.24 0.055**
HE .7938511 .0754271 10.52 0.000***
CD .2933056 .1139605 2.57 0.033**
FS -.0415108 .0651128 -0.64 0.54
INTERCEPT -1.984495 1.624869 -1.22 0.247
R Sq. 0.9988
PROB. 0.00000***
Source: Regression output developed by researcher using STATA
11(2023). (*, **. ***, indicate significant levels at 10%, 5%, and 1*
respectively).

The R-square is 99 % which shows the CRS variables explain PR to the

extent of 99% while the remaining percentage are explained by other

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factors that are not captured in the model. The probability is significant at
1% an indication that the model is fitted and the study results can be
relied upon.

The regression result of the study’s model indicates that some

independent variables have positive impact PR while others have negative
impact. Thus; PR = -1.984495 + 4.466499RD + .7938511HE +
.2933056CD - .0415108FS + e. from the regression results, only FS have
negative relationship with PR while RD, HE and CD have positive
relationship with PR.

The results in table 4. Show that CSR represented by RD has positive

and significant on PR in the Nigerian north east firms at 5% level of
significance. This is in line with the result of Ahmad, Hajah and
Muhammad (2020) contradict the findings of Joe and Kechi (2013). With
this result, the hypothesis one which stated the there is no positive
relationship between CSR and firm performance was tested here. Base on
the interview the researcher had with respondents they affirmed that with
the investment in road development the communities are happy and agile
especially doing their business. With this result and interview conducted,
the alternative hypothesis is accept which say there is positive relationship
between CSR and firm performance and the null hypothesis is rejected.

Concerning the relationship between HE and PR in the Nigerian north

east firms, the regression result in table 4 reported a positive and
significant association at 1%. Indicating that the firms as a result of
investing in CSR it has positively influence firm performance and
community development. This confirm the result of Godwin (2012), and
Ebeneze and Mercy (2022) but negate the result of Joe and Kechi (2013).
The hypothesis two was tested here which stated that communities does
not feel the impact of community development. On the interview granted
to respondent from the host communities, they responded positively that
they actual feel the activities of the firms’ commitment to make sure they
enjoyed some basic amenities free charge. With this respond the
researcher got and the result of the regression, the alternative hypothesis
is accepted which says the communities feel the impact of community
development and the null hypothesis is rejected.

The association between CD and PR, the regression result in table 4

reveals that CD is positively and significantly associated with PR in

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selected firms in northeastern Nigeria at 3% level of significance. This
implies that as community development is improved, it will enhance the
firm financial performance in the north east. This confirm the result of
Babalola (2012), Suresh, Saniland Khairiah (2018). The researcher will
test the 3rd hypothesis here which says firm does not need to increase the
level of community in the host community. Under this, the researcher
met with two sides, the firms and the host communities. The firms
responded categorically that as a result the activities of book haram in the
region they need to increase in the level of CSR to the communities to
reduce the hardship experienced by the communities as a results of Boko
Haram undoing. On the part of the communities, the feelers from them
is increase in the activities in the CSR will strengthen their relationship
with the firms because of what the communities had gone through during
the insurgency. With this, the alternative hypothesis is accepted which
says firms need to increase the level of community development in the
region but the null hypothesis is rejected.

Table 4 indicates that firm size, measured by the natural log of total asset,
is not significant and negatively associated with firm performance at 50%
significance.

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

The respondents were categorically of the view that most of what the
firms did for them are merely obligatory but not compulsory. They
pleaded that the government should make a law mandating all firm to
invest in CSR to reduce the conflict that normally exist between the host
community and the firms. There is positive and significant association
between RD and PR in the Nigerian north east firms. An indication the
activity of firms in the north eastern region in CSR improve the living
standard of the people in that region.

HE represented by investing in health is positively and significantly

associated with extent of firm performance in the Nigerian north east.
Community development is found to be significant and positively
associated with firm performance in the Nigerian north east firms. The
positive inclination here shows that the companies invested in CSR which
make the community to develop.

The present study, much like other empirical studies, has a number of
limitations; finding solutions to these problems might serve as a guide for

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further investigation. To begin, the study excluded the multinational
sector listed because they have a regulatory structure and different
corporate governance rules issued by the CAMA. Thus, the multinational
sector in future research would increase the comprehension of CSR in
the North East setting. Second, since this research only included in the
north eastern Nigeria, the findings are limited in generalizability and
could not be similar in other environments. Therefore, this study advises
future researchers to take into account other variables such as
multinational companies, other variables like amount spent on pollution
of the air by the companies. Despite these minor limitations, this study
makes a contribution by elucidating the relationship between CSR and FP
and the role of community development in the north east Nigeria. Thus,
enabling us to generalize the findings.

In view of the above findings and conclusions, the study recommends

that:
a. The government should make laws and enforce on all companies
in Nigeria to invest in corporate social responsibility.
b. By the interview granted and the respond received, the firms
should increase more especially on human capital development by
investing more in educational sector
c. The government should make minority to all companies to invest
in CSR

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