Abstract:
This study sought to establish the relationship between Corporate Social Responsibility and
financial performance of commercial banks listed at the Nairobi Stock Exchange. To achieve
this, the stud investigated the effect of the amount of corporate investment made by
Commercial Banks listed on NSE on Philanthropic, Ethical, Legal and Economic
Responsibilities on their financial performance. The study adopted a longitudinal approach
based on an explanatory research design. The target population for this study was 11
commercial banks registered under the Central Bank of Kenya (CBK, 2017) and listed under
the NSE. (See Appendix I). Considering this small number, this study was a census.
Secondary data collected between 2006 and 2016 was the primary focus of this study. Data
analysis was then be conducted using STATA. All the Panel data properties of the data were
considered during this analysis. Results indicated that investing in Philanthropic Activities
would result to a positive and significant effect on financial performance as measured by
ROI. However, investments in ethical, legal and Economic Activities would result to
insignificant increases in financial performance of commercial banks listed at the NSE. The
study therefore recommends stakeholders of commercial banks to invest more on
Philanthropic Activities if they are to realize significant improvements in the performance of
their finances.
