Corporate Social Responsibility and Financial Performance Evidence from Ethiopian Leather Industry.pdf

Corporate Social Responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits to all stakeholders. The effect of corporate social responsibilities of a business on their financial performance has been a subject of intense argument and its empirical analysis result shows inconsistent findings. This study aims to examine the effects of CSR and the financial performance of Ethiopian leather industries. A theoretical framework is proposed based on a stakeholder approach by defining five stakeholders (i.e., employee, customer, supplier, community & environment) and taken as the independent variables. This study uses a questionnaire survey for the measurement of CSR and a three consecutive (2014–2016) years’ average return on the asset enables us to measure firms’ financial performance data, analyzed using a multiple regression models. Finally, this study reveals that a statistically significant positive effect of employee CSR, supplier CSR, environment CSR and aggregate CSR on financial performance whereas customer and community CSR factors are negatively related to return on asset