corporate social responsibility engagement in Kenya: bottom line or rhetoric?

Abstract

Over the last three decades, the concept of Corporate Social Responsibility (CSR) has sparked considerable debate in the literature on management research. While previous research on the relationship between CSR and firm performance has largely been based on data gathered in developed countries, this paper examines the relationship between CSR and firm performance in Kenya, using a sample of 352 firm-years during the period 2005–2012. CSR was measured using four dimensions relevant to Kenya: employee CSR, product/service CSR, community CSR and environmental CSR, and aggregated using my own CSR index. Firm performance was measured using both ROA and ROE. Content analysis was used to collect data from the financial reports of companies. The results indicate a positive and significant relationship between employee CSR, product/service CSR and community CSR and firm performance; environmental CSR, on the other hand, was not significant. The overall CSR index was found to be positive and significant to both measures of firm performance.