Corporate Social Responsibility Disclosures and Cost of Equity Capital Evidence from Listed Interest Taking Banks in Nigeria (Published)
Disclosure of corporate social responsibility is strategic to the sustainability of any firm especially banks that have contributed to the economic development of Nigeria. When firms fail to adequately disclose their corporate social responsibility practices, providers of funds may be unaware of the risk and opportunities they are exposed to by investing in sech banks. The main objective of this study therefore was to examine the effect of corporate social responsibility disclosures on cost of equity of interest taking banks listed on the floor of the Nigerian Exchange Group from 2014-2023. The research design adopted for this study was ex post facto and secondary data were used. The population of this study consisted of 13 interest taking banks and 11 of these banks were purposively selected as the sample size. The panel regression analysis was employed in analyzing the data set and the statistical package employed was STATA version 16. The findings of this study revealed that community relations disclosures have a significant negative effect on the cost of equity capital; social donations disclosures have a positive but not statistically significant effect on the cost of equity capital while employee relations disclosures have a significant positive effect on the cost of equity capital of listed interest-taking banks in Nigeria. Based on the above findings, it was concluded that corporate social responsibility disclosures help reduce cost of equity of listed interest-taking banks in Nigeria. It was therefore recommended among others that management of these banks should be actively involved in community development and ensure transparent disclosure of these practices to stakeholders as this promote their sustainability and inclusiveness.
Keywords: CSR disclosures, community relation, cost of equity, employee relations, social donations.