COMPARATIVE ANALYSIS OF EFFECT OF COMMUNITY DEVELOPMENT DISCLOSURE ON PROFITABILITY OF IN FINANCIAL AND NON-FINANCIAL FIRMS IN NIGERIA

Abstract

The study comparatively analysed the effect community development disclosure, while firm profitability was indexed by return on invested capital. Ex-post facto research design was adopted for the study, on a population of 154 listed firms on the Nigerian Exchange Group. The sample size was selected using a random sample technique, which yielded a sample of twenty financial firms and twenty non-financial firms. The study gathered data from annual reports spanning 2013 to 2022 (10 years) from selected firms as secondary sources. The effect of social sustainability disclosure on firm profitability was estimated using the panel least square regression technique, facilitated by Eviews Version 12. However, to compare the difference between the effects in both sectors, Paired Sample T-test was conducted, using Statistical Package for Social Sciences version 23. The test of hypotheses showed that: there is no statistical significant difference in the effect of community development disclosure on return on invested capital between financial and non-financial firms in Nigeria. In conclusion, tailoring social sustainability strategies to the specific needs and operational contexts of the different sectors is important in order to maximise the benefits of social sustainability disclosure. The study recommends that Financial and non-financial firms should evaluate the cost-benefit ratio of their community development initiatives to ensure alignment with their overall business objectives.