Corporate Social Responsibility and Profitability in Nigeria Telecommunication Industry: A Case Study of MTN Nigeria

Abstract

In Nigeria, the telecom sector has a tremendous history of engaging themselves in different social activities which is known as CSR (Corporate Social Responsibility). The present paper examines the relationship between CSR and profitability of Nigeria telecommunication industry. The study assessed the impact of CSR practices using secondary data collected on social responsibility expenditure and profit after tax from MTN Nig. Ltd annual reports (2002-2012). The data were analysed using the Ordinary Least Square (OLS) model of regression using SPSS 20. To assess the impact as well as test the hypothesis of the study whether there is a relationship and the extent of the relationship between the independent variable (corporate social responsibility and the dependent variable (profit after tax). Results revealed that CSR impacted positively on profitability and the environment. The analysis showed that 79% of the variance of profit after tax of MTN has been explained by the benefit accrued from corporate social responsibility. The hypothesis formulated was tested and the result shows that there is significant positive relationship between corporate social responsibility and profitability in MTN Nigeria Ltd. The study concluded that CSR expenditure provides good returns for the company in short run and in long run it will provide better return surely.

Keywords: Corporate Social Responsibility, Profitability, Financial Performance, Nigeria Telecommunication Industry

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