THE INFLUENCE OF PROFIT SHARING IN SUSTAINING CORPORATE GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY ON FIRM PERFORMANCE: A COINTEGRATION APPROACH
Abstract:The study examined the influence of profit
sharing in sustaining corporate governance and corporate social responsibility
on firm performance in Nigeria. This Study is predicated on the Stewardship and
Agency theory. The study disaggregated firm performance into revenue, market
share, profitability and cash flow in line with the theories reviewed. The data
were obtained from the company review published audit financial report.
Collected data covered the period of 27 years spanning from 1992-2019. Based on
the mixed level of stationarity of the variables as revealed by the unit root
test, the study made use of auto-regressive distributed lag (ARDL) technique to
analysis the data. The bound test revealed that; there was presence of
co-integration (long-run relationship) among the dependent and all the
explanatory variables consequently the study estimated the ARDLECM. The result
revealed that market share have positive and non-significant influences
corporate governance and corporate social responsibility, the result further
showed that Revenue (RVN), Profitability(PRT) and Cash Flow (CFL) had a
positive and significant impact on corporate governance and corporate social
responsibility in Nigeria which is a clear indication that profit sharing have
positive and significant influence in sustaining corporate governance and
corporate social responsibility on firms performance both in short and long
run. The findings of this study are in tandem with stewardship theory.