Effect of Environmental and Social Cost on Performance of Manufacturing Companies in Nigeria

Ngozi. G Iheduru; Ike Romanus Chukwuma

doi:10.46281/ijafr.v4i2.378

Ngozi. G Iheduru Faculty of Business Administration, Department Of Accountancy, Imo State University, Owerri, Nigeria
Ike Romanus Chukwuma School Of Postgraduate Studies, Faculty of Business Administration, Department Of Accountancy, Imo State University, Owerri, Nigeria

DOI: https://doi.org/10.46281/ijafr.v4i2.378

Keywords: Environmental Accounting, Social costs, Performance, Return on Capital Employed, Earnings per Share, Net Profit Margin and Dividend per Share.

Abstract

This study examines the effect of environmental and social costs on performance of manufacturing companies in Nigeria. The objectives of this study are to examine the relationship between environmental and social costs and performance of manufacturing companies in Nigeria. The data for the study were collected from annual reports and accounts of fourteen (14) randomly selected manufacturing companies in Nigeria. The data were analyzed using multiple regression models. The key findings of the study shows that there is significant negative relationship between Environmental and social costs and Return on Capital Employed (ROCE) and Earnings per share (EPS) and a significant positive relationship between environmental and social costs and Net Profit Margin (NPM) and Dividend per Share (DPS). Based on this it was recommended that government should give tax credit to organizations that comply with its environmental laws in order to reduce their environmental costs and that environmental reporting should be made compulsory in Nigeria so as to improve the performance of organizations and the nation as a whole.

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