Abstract

Abundant studies were undertaken throughout the world, mainly in the context of advanced economy, to investigate the correlation between corporate social responsibility (CSR) and corporate financial performance (CFP) though the studies came up with conflicting results. Some studies shows a positive relationship between corporate social responsibility practice and firm financial performance (see for example, Waddock Graves, 1997; Cheruiyot, 2010), on the other hand, some of the studies shows negative relationship (Cordeiro Sarkis, 1997; Wagner et al, 2002) and still others showing that there is no relationship between the two variables (McWilliams Siegel, 2000; Aragon Lopez, 2007). This study used a mixed research approach and applied multivariate econometric model to assess the relationship between CSR and Banks’ financial performance in Ethiopia. The finding shows that, there is no relationship between the financial contribution for CSR activities and CFP at 1% significance level which similar to the findings of McWilliams Siegel, 2000; Aragon