THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BANKS FINANCIAL PERFORMANCE. THE CASE OF LISTED BANKS IN GHANA
THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BANKS FINANCIAL PERFORMANCE. THE CASE OF LISTED BANKS IN GHANA
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Date
2022
Authors
FRIMPONG, SAMUEL
(7201540010)
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Abstract
This thesis investigated the impact of CSR and financial performance of banks listed
on the Ghana Stock Exchange (GSE). Data collection is carried out with data
documentation that is based on financial reports. Secondary data was obtained from the
financial statement of eight (8) banks over the past ten years (2011 to 2020) to answer
the research questions. This study conducted a content analysis on listed firms’ annual
and sustainability reports and corporate websites to develop an aggregate CSR
disclosure index based on Ehsan et al.’s (2018) model which had already been pre tested and standardised with a Cronbach alpha value of 0.924. Data were analysed
quantitatively with Return on Asset (RoA) and Return on Equity (RoE) as a measure of
performance which was also the dependent variable and expenditure on CSR as an
independent variable. The findings emerging from the analysis reveals that CSR has
positive impact on financial performance. Specifically, CSR exerts an insignificant
positive impact on ROA and a significant positive effect on ROE. The study
recommends that banks should be encouraged but also cautious in undertaking CSR.
After all, it could be cautious in undertaking CSR because it could negatively affect
their Return on Asset and Return on Equity. Also, it is recommended that most CSR
projects should be weighted by the banks if possible and a cost-benefit is done even
before deciding whether to go on with the project or not. The implication of the research
is that implementing corporate social responsibility is very important to increase banks
value and banks sustainability in the future