International Journal of Social Sciences and Management Review

EFFECT OF STAKEHOLDERS’ COSTS ON PROFITABILITY OF BREWERIES FIRMS IN NIGERIA

Authors: Asogwa, Joseph Okechukwu*, Professor Nwoha, Ernest Chike, Nwankwo, Caroline Nkechinyere, Ph.D

ABSTRACT

The study analyzed the effect of stakeholders’ costs on the profitability of brewery firms in Nigeria. The specific objectives of the study were, to examine the effect of dividend payout, corporate social responsibility expenses, employees’ cost, and financial cost on the return on assets of breweries firms in Nigeria. The sample consisted of five (5) breweries listed on Nigeria Stock Exchange during the period from 2011 to 2020. Time series data covering the period were extracted from the annual reports and financial statements of the selected firms and analyzed using multiple regression analysis. Findings from the study suggest that dividend payout, corporate social responsibility expenses, and employees’ cost positively and significantly affect the return on assets of the breweries’ firms while finance cost negatively and significantly affects the return on assets of the firms during the period. The implication of these findings is that an increase in dividend payout, corporate social responsibility expenses, or employees cost will increase the return on assets of the firms while an increase in finance cost will decrease the return on assets of the firms. Based on these findings, the study recommended that the breweries managers in Nigeria should formulate dividend policies that will enable the firms to pay regular dividends to their shareholders while at the same time retaining enough earnings for future growth and expansion of the firms. The study also recommended that firm managers should implement corporate social responsibility programs in their host communities by liaising with community leaders and ensuring that CSR expenses feature in the firms’ annual budgets.

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