Corporate Social Responsibility and Value Maximization: Evidence from System Gmm

The study examines the effect of corporate social responsibility on market value of Deposit Money Banks (DMBs) in Nigeria. The work sought to investigate if environmental and social corporate social responsibility expenditure impact on the market value of five (5) Deposit Money Banks in Nigeria from 2011 to 2020. Annual data was used for this study and sourced from the annual financial statements of the DMBs. The study employed the system generalized method of moments (SYS-GMM) in analyzing the nature of dynamic relationship between market value and corporate social responsibility of the selected DMBs. The static model revealed positive and insignificant relationship between environmental CSR expenditure and market value. In addition, there is a negative and insignificant relationship between social CSR expenditure and market value. Result of the short run model reveals that environmental CSR expenditure and social CSR expenditure have positive and significant impact on the market value of the selected companies. The study recommends that DMBs should increase their social expenditure by funding social projects like schools, portable drinking water and other human capital projects.