HOW CORPORATE GOVERNANCE AND CSR DISCLOSURE AFFECT FIRM PERFORMANCE?


Ekonomika a management

HOW CORPORATE GOVERNANCE AND CSR DISCLOSURE AFFECT FIRM PERFORMANCE?

CSR (corporate social responsibility) disclosure evolved as a result of corporate reporting in response to changes in conditions in which companies operate. Gray, Owen and Adams (1996) describe CSR disclosure/reporting as „the process of communicating the social and environmental effects of the economic actions of organizations to particular interest groups within society and society at large“. Elkington (1997) states that the terms CSR reporting, Social Reporting, Corporate Citizenship, Sustainability Reporting and Triple Bottom Line Reporting have been employed in the studies interchangeably. To meet 21st century corporate challenges, the corporate reporting system has changed somehow with an inclusion of non-financial disclosure. Krasodomska and Cho (2017) explain the extent of non-financial reporting presented by the corporation regarding activities such as human resources, risk management, product innovation and quality, and impact of corporate decisions on environment and society.
Jméno a příjmení autora:

Muhammad Suhaib Manzoor, Ramiz ur Rehman, Muhammad Islam Usman, Muhammad Ishfaq Ahmad

Rok:
2019
Ročník:
22
Číslo:
3
Klíčová slova:
CSR disclosure, service industry, firm performance, corporate governance
DOI (& full text):
Anotace:
The study aims to provide empirical evidence of firm performance relation with board characteristics (Independent directors, Executive directors, and CEO duality), ownership structure (Managerial,…více
The study aims to provide empirical evidence of firm performance relation with board characteristics (Independent directors, Executive directors, and CEO duality), ownership structure (Managerial, State, and Foreign ownership) and CSR disclosure. The CSR disclosure by listed firms in developing countries has become a phenomenon during recent times. However, the type of CSR disclosure is still non-financial. However, it is an interesting topic for researchers to evaluate the performance of the firm in the presence of non-financial disclosure of CSR. Firm level panel data has collected for firms listed in KSE-100 index in Pakistan between 2012 and 2016. The study uses panel data analysis to estimate the models using firm size as a control variable. Results of the empirical research indicate that firms in the service industry are less disclosing the CSR, but such disclosure is positively related to firm performance. The authors find evidence that executive directors when engaging into CSR disclosure activities, it negatively and significantly impact the firm performance. The authors qualify the results regarding the CEO duality, independent directors, managerial ownership, state ownership and foreign ownership with impact on firm performance. Further, the results suggest that state ownership is influential in the service industry and negatively affect the firm performance. This study contributes to the existing body of knowledge in developing countries context that how CSR non-financial disclosure, especially in the service firms, affect the firm financial performance. Future research should use cross-country analysis for assessing the models and examining the results across countries, industry, and sectors. From a practical perspective, the results may guide firms how to engage in CSR disclosure activities without hampering the firm performance while considering the other firm level factors. This study is extensively novel in all of its contents and contributes mainly to the literature of CSR disclosure and firm performance.
Sekce:
Ekonomika a management

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