Corporate Social Responsibility (CSR) and Corporate Profitability in Africa: Non-Linearities, Synergies and Complementarities

The study investigates the non-linear, synergistic, complementary, and long-term effects of corporate social responsibility on corporate profitability, with a focus on stakeholder responsibility and profitability in Africa. The study employs a dynamic Generalised Method of Moments panel-data approach, analysing 369 listed firms in Africa from 2006 to 2020. The findings show an inverted non-linear threshold effect of social and governance CSR on shareholder profitability, but not on stakeholder profitability, implying that the social and governance CSR might harm corporate shareholders beyond a certain level. Managers should exercise caution when selecting and combining CSR activities, as undertaking multiple initiatives simultaneously can create synergies that improve both stakeholders' and shareholders' profitability.