The Effect of Corporate Social Responsibility on Value of the Firm's in Ethiopia : The Case of Dire Dawa National Cement Share Company

Corporate Social Responsibility has become a growing concern for business and scholars where by its effect on firm"s performance have yet to be widely explored in various contexts, specifically in Ethiopia. This research study focused on measuring the effects of corporate social responsibility on a firm"s value, taking Dire Dawa national cement Share Company as a case study. The study has employed stakeholder theory to analyze the CSR practice of the company. It has used CSR initiatives towards the community, Employees, Environment, and Customer to analyze the causal relationship to the value of the firm. Also applied mixed research methods of qualitative and quantitative research methods. A mix of sampling methods was used including Stratified Sampling, simple random sampling, and convenient sampling as a technique to select the respondents. The analysis was performed using descriptive and inferential statistics by using SPSS Version 22 and content analysis of interviews. The finding shows that CSR- Community and CSR- Environment were positively and significantly affect the value of the firm as they were hypothesized. And the remaining CSR- Employee and CSR- Customer has a positive relation, however, statistically insignificant rejecting the hypothesis. Also, the correlation analysis between CSR and EPS shows positive but statistically insignificant. Thus through the finding of the study, it is possible to conclude that CSR has a positive effect on the value of the firm. The study suggests that the company could employ its CSR initiatives for the betterment of the overall performance of the company as well as the value of the firm. The Company needs to consider building a strong relationship with the community, relevant stakeholders, the environment, its employees and customers". As a new concept in the Ethiopian Business practice, further research could be conducted to explore more findings in the area and contribute towards the expansion of the concept