The impact of Corporate Social Responsibility on Cost of capital of Listed Companies in Nigeria Stock Exchange: The Relationship

AFRAG026

The impact of Corporate Social Responsibility on Cost of capital of Listed Companies in Nigeria Stock Exchange: The Relationship IVWURIE Aghogho Emmanuel ivwurie@hotmail.com

Dr Ofogbe Nyore Sandra sandy4pg@gmail.com

Dr Anisiuba, Chika Anastesia chika.anisiuba@unn.edu.ng Department Accounting, University of Nigeria, Nsukka1

Abstract

This study aims to investigate the impact Corporate Social Responsibility has on the Cost of Capital. There has been moderately scarce literature on the relationship exiting between Corporate Social Responsibility and the cost of capital in Nigeria. Many studies that have analysed the relationship between the Corporate Social Responsibility of companies quoted in the Nigeria Stock Exchange, as it relates to their overall performance, have neglected the Cost of Capital component. Corporate Social Responsibility dimensions, such as Corporate Social Performance, Environmental performance (ENP) and Corporate Governance Performance were given vital consideration in determining if Corporate Social Responsibility has in any way reduced the cost of getting capital. In carrying out this study, the study chooses Annual panel data of 96 companies quoted in the Nigeria Stock Exchange for the duration 2005-2019 judgmentally. Thomson Reuter Index was used as a measure of Corporate Social Responsibility, while Cost of Equity and Cost of Debt were used as a measure of the Cost of Capital. Findings revealed that companies that spend on Corporate Social Responsibility have a better chance of accessing capital at a reduced cost. The results support existing works by scholars, especially in the developed countries that have done a lot in this aspect. In conclusion, companies that spend on Corporate Social Responsibility have a better chance of accessing capital at a better and low cost. Based on the findings, the researcher advocates a consistent investment in issues that concerns Corporate Social Responsibility since it leads to the ease of accessing funds at a reduced cost.

Keywords: Corporate Social Responsibility, Cost Of Capital, Thomson Reuter Index, Cost Of Equity, and Cost Of Debt, Relationship.

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