THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON FIRM VALUE AND PERFORMANCE OF LISTED COMPANIES IN GHANA

Abstract

This study aims to analyze and explain the relationship between the Corporate Social Responsibility (CSR) and the Firm Value, either direct or indirect through the Corporate Financial Performance (CFP) and the Firm Risk. The research object is the listed companies in Ghana Stock Exchange for the period of 2014-2017. The CSR is measured from information disclosure index based on Global Reporting Initiative (GRI) 3.1 reporting standard. The Tobin’s Q and Price to Book Value (PBV) are used as the indicators of the Firm Value. The CFP is determined from the Return on Assets (ROA) and the Return on Equity (ROE). The Firm Risk is computed from the idiosyncratic risk. A Structural Equation Modeling (SEM) is utilized to analyze the data. The results show that the CSR has no significant effect to the Firm Value. In one side, the CSR has positive significant effect to the CFP and the CFP has positive significant effect to the Firm Value. Further, the CSR has positive significant effect to the Firm value through the CFP. In the other side, the CSR has negative significant effect to the Firm Risk, and the Firm Risk has negative significant effect to the Firm value. However, the CSR has no significant effect to the Firm Value through the Firm Risk. 3