Universal Journal of Accounting and Finance Vol. 9(5), pp. 946 - 960
DOI: 10.13189/ujaf.2021.090506
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Long-Run Relationship of Corporate Social Responsibility and Cost of Capital of Quoted Companies in Nigeria Stock Exchange: Nigeria Evidence

Ofogbe Nyore Sandra ¹, Ojiakor Ijeama P. ¹, Nnamani Chidiebere ¹, Ifeoma Maria Ihegboro ², Anisiuba Chika Anastesia ^1,*, Ruth Lass ^1
1 Faculty of Business Administration, Accountancy Department, University of Nigeria, Nsukka, Nigeria
² Faculty of Business Administration, Banking and Finance Department, University of Nigeria, Nsukka, Nigeria

ABSTRACT

There has been moderately scarce literature on the relationship between company social responsibility (CSR) and the cost of capital (COC) in Nigeria. Numerous studies have analysed the association between the CSR of the companies quoted within the Nigeria Stock Exchange (NSE) relating to their overall performance neglecting the COC component. This study examined the long-run relationship between CSR dimensions (Corporate social performance (CSP), environmental performance (ENP) and corporate governance (CGP) dimensions and cost of debt (COC). It seeks to investigate if CSR has, in the long run, reduce the cost of capital. Annual panel data of 96 companies for the duration; 2005-2020 quoted in the NSE were selected judgmentally. Thomson Reuther Index (TRI) was used as a measure of CSR, whilst the cost of equity (COE) and cost of debt (COD) were used as a measure of COC. Panel ARDL model was adopted to analyse the long-run relationship between CSR and COC. Findings revealed that companies that spend on CSR have a better chance of accessing capital at a reduced cost. The results support the findings of scholars works, especially in the developed countries. In conclusion, companies that spend on CSR have a better chance of accessing capital at a better and low cost. Based totally on the findings, the researcher advocates an on-stop investment on issues that concerns CSR as this may, if consistent, ease the getting of funds at a reduced cost in the long run.

KEYWORDS
Corporate Social Responsibility, Cost of Capital, Thomson Reuther Index, Cost of Equity, Cost of Debt, Corporate Social Performance, Environmental Performance, Corporate Governance Performance

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Ofogbe Nyore Sandra , Ojiakor Ijeama P. , Nnamani Chidiebere , Ifeoma Maria Ihegboro , Anisiuba Chika Anastesia , Ruth Lass , "Long-Run Relationship of Corporate Social Responsibility and Cost of Capital of Quoted Companies in Nigeria Stock Exchange: Nigeria Evidence," Universal Journal of Accounting and Finance, Vol. 9, No. 5, pp. 946 - 960, 2021. DOI: 10.13189/ujaf.2021.090506.

(b). APA Format:
Ofogbe Nyore Sandra , Ojiakor Ijeama P. , Nnamani Chidiebere , Ifeoma Maria Ihegboro , Anisiuba Chika Anastesia , Ruth Lass (2021). Long-Run Relationship of Corporate Social Responsibility and Cost of Capital of Quoted Companies in Nigeria Stock Exchange: Nigeria Evidence. Universal Journal of Accounting and Finance, 9(5), 946 - 960. DOI: 10.13189/ujaf.2021.090506.