Author(s): Adebanjo Joseph Falaye, Temiloluwa Obidapo, Titilayo Ogunjimi, Blessing Obo-ifeanyi, Godswill Nwokoro, Godswill Nwokoro,
This study set out to investigate the performance of selected impact that corporate social responsibilities have on the profitability of agro-allied firms. Secondary data used was extracted from the financial statements of five agro-allied firms that listed on the Nigerian Stock Exchange (NSE) for 2010–2020 (eleven years). Quantitative research design was used. The data collected were analyzed using simple linear regression method. Profitability was measured using gross profits and profits after tax; while corporate social responsibility was measured using the actual sums of money expended on corporate social responsibility activities of firms under study. Based on the results of the study, profitability proxied by gross profits and profits after tax and corporate social responsibility activities of the firms are positively related. The result shows that corporate social responsibilities constitute an essential factor in business and consequently add to business profitability. Hence proper expenses on corporate social responsibilities help solve the agency theory problem of agency costs that arise when control of companies is separated from the ownership, whereby managers employ the firm’s resources for personal gains instead of maximizing the value of the firm or owners’ equity. The value of the firm and the shareholders’ wealth can be maximized through enhanced profitability via efficient expense on corporate social responsibility ventures.