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Corporate Social Responsibility is gaining more awareness in Zanzibar as the firms are recognizing the important role it plays on firm’s performance. This research empirically examines the effect of corporate social responsibility and financial performance of hotels in Zanzibar. CSR is measured by cost paid for corporate social responsibility while financial performance is measured by using profitability measures such as ROA and ROE.
By utilizing panel data of 4 hotels for 7 years period from 2011-2017, the study uses ordinary least square method-random effect regression, model. The study found CSR has a significant positive effect on ROA and ROE of hotels in Zanzibar. The study also found that control variables (i.e leverage, R & D, size) have a significant effect on ROA and ROE. The study recommends more investment in CSR as a way of boosting hotels profitability.
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