Effect of Financial Performance on Social Sustainability of Listed Industrial Goods Firms in Nigeria

Abstract

This study examined the effect of financial performance on the social sustainability of listed industrial goods firms in Nigeria. The study population comprised thirteen listed industrial goods firms in Nigeria, from which nine firms were selected as the sample. Secondary data were obtained from the annual reports and accounts of the sampled firms covering the period from 2012 to 2024. The study employed Panel-Corrected Standard Error (PCSE) regression analysis to test the stated hypothesis. The results revealed that financial performance, measured by net profit, exerted a positive and statistically significant effect on social sustainability, proxied by corporate donations, among listed industrial goods firms in Nigeria (β = 0.006643, p = 0.0000). The findings suggest that financially strong firms are more capable of supporting social sustainability initiatives through sustained investments in community development and stakeholder welfare. Consequently, policymakers should design incentive-based policies, such as tax reliefs and public recognition programmes, to encourage profitable firms to commit a greater proportion of their earnings to impactful and measurable social sustainability projects.