EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES ON FIRM PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES AT KARIOBANGI LIGHT INDUSTRIES, NAIROBI

Henry Kimutai Rono, Simon Kipchumba

Abstract


This study sought to determine the effect of corporate social responsibility (CSR) on the firm performance of small and medium enterprises at Kariobangi light industries, Nairobi. The objective of the study was to determine: how environmental CSR activities, philanthropic CSR activities, economic CSR, and legal CSR activities influence the firm performance of the said SMEs. This study will benefit various groups including top management, the government especially the ministry in charge of industrialization, SMEs practitioners, policy-makers, academics, and future researchers. The study employed a descriptive research design. The target population was the owners/workers of18metal engineering works along with 9 SMEs dealing with paint production and 3 SMEs that deal with chemicals and related accessories within Kariobangi Light Industries. Data was collected by using questionnaire method and it was analysed using descriptive and inferential statistics. For descriptive statistics, the study used frequency, percentages and mean. For inferential statistics, the study used Pearson’s Correlation Analysis and Multiple Regression Analysis. The researcher established that environmental CSR activities, philanthropic CSR activities, economic CSR, and legal CSR activities influences firm performance of SMEs of Kariobangi Light Industries positively. In turn, the results were further presented in different visual spectrums to encounter the reliability of the entire scope. Study results findings rejected the hypothesis that environmental CSR activities, philanthropic CSR activities, economic CSR, and legal CSR do not have a significant effect on firm performance. The study concluded that there is a positive association between corporate social responsibility and firm performance of the company. From the results obtained the researcher recommended SMEs should continue to engage in corporate social responsibility to yield the benefits associated with corporate social responsibility engagement and further improve its overall performance.


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