Corporate Social Responsibility and its effect on profitability the case of Breweries in Ethiopia

Abstract

This study investigates the impact of Corporate Social Responsibility (CSR) on the profitability of breweries in Ethiopia, using six years of financial data (2016-2021) from Heineken Ethiopia, Dashen Brewery, Diageo, United Beer, Habesha Brewery, and BGI Ethiopia. The study examines the relationship between CSR, net profit, return on assets (ROA), and return on equity (ROE) through the lens of stakeholder theory. Data were collected from annual financial reports of the companies and analyzed using descriptive statistics, correlation analysis, and regression analysis. The findings suggest that CSR positively affects net profit, ROA, and ROE of the breweries in Ethiopia. The results imply that CSR is not only beneficial for society and the environment but also for the financial performance of companies. The study provides useful insights for brewery companies and policymakers in Ethiopia and beyond to adopt and implement CSR practices to improve their financial performance.