CSR Inflections: An Overview of CSR Practices on Financial Performance by Public Listed Companies in Malaysia

Abstract

Of late, there has been growing demand for companies to intensify its corporate social responsibility (CSR). It is no longer one of the responsibilities of the companies but has become the responsibility of companies to give back to the society in which it has been operating and making huge profit. Unfortunately there appears to be a wide gap between the level of CSR awareness between companies from developed countries and those from the developing companies. Companies from developed countries have higher CSR level of awareness and faced no difficulty in disclosing their CSR activities relatively to the companies in the developing countries (including Malaysia). Thus, the aim of this paper is to examine the level of CSR disclosure of consumer products and trading and services industries from Malaysia. In addition, the study also would like to ascertain if the level of CSR disclosure influences the performance of the company in terms of its return on asset (ROA) and firm value (Tobin's Q). The study starts with the development of CSR disclosure index and using the index to determine if company's performance is related to its contribution to the society. Panel data is used to achieve the second objective. Findings of the study provide positive, negative and insignificant results between CSR activities on the company performance.

Corporate Social Responsibility Disclosure and Financial Performance of Shariah PLCS in Malaysia

“…Therefore, the hypothesis (H2) is accepted. This finding is in line with the prior studies of Abdul Wahab et al (2017); Choi et al (2010); and Jo and Harjoto (2011). From the observations, it can be concluded that stakeholders do not react negatively when businesses use certain financial resources to support society's growth.…”

“…However, the recent studies of CSRD and financial performance in developing countries had produced mixed results (Ali et al, 2017;Gi et al, 2015;Suhazeli et al, 2014;Szegedi et al, 2020). These studies includes (Bodhanwala and Bodhanwala, 2018;Dewi and Monalisa, 2016;Lee and Isa, 2020;Niresh and Silva, 2018;Oh and Park, 2015;Platonova et al, 2018;Tsoutsoura, 2004;Waddock and Graves, 1997;Yusoff and Adamu, 2016) for positive correlation between CSRD and ROA, while (Abdul Wahab et al, 2017;Aras et al, 2010;Dkhili and Ansi, 2012;Lioui and Sharma, 2012;Trebucq and d'Arcimoles, 2002) failed to find an impact of financial performance on CSRD.…”

“…Campbell (2007) states that companies less likely to engage in CSR when they are: (i) experiencing a weak of financial performance, (ii) operating in an unhealthy economics environment; and (iii) there is either too much or too little competitions. However, a quite number of researchers arguing that the low level of CSR reporting among Malaysian companies showed that CSR reporting was still in its infancy (Abdul Wahab et al, 2017;Ahmed, 2013;Lui et al, 2021;Mamun et al, 2017;Othman et al, 2011;Thompson and Zakaria, 2004;Yang and Yaacob, 2012;Zainal and Zainuddin, 2013;Zainon et al, 2014). There is a significant issue at stake for Shariah PLCs in terms of establishing a competitive edge that distinguishes them from non-Shariah PLCs in Malaysia. Therefore, based on eleven years (2007 to 2017) of data, the primary objective of this study is to address this research gap by looking into the CSRD reporting levels, particularly for Shariah PLCs in Malaysia.…”

Ethical commitment, institutional investors and financial performance: Malaysian evidence

“…The findings aligned with ASEAN Corporate Governance Scorecard 2019, where Malaysian companies scored between 58.7 and 98.40. This result indicates that Malaysian companies are committed to establishing ethical practises contrary to previous studies conducted in Malaysia such as Hashim, Abidin, et al (2020), Razali et al (2018) and Wahab et al (2017). The descriptive statistics for INVEST have an overall average of 58.7%, with a maximum of 96.3%.…”

The complementarity between corporate social responsibility disclosure and institutional investor in Jordan

“…More fundamentally, CSR disclosure (CSRD) has attracted considerable research interests since the 1980s (Ullmann, 1985; Ness and Mirza, 1991; Blacconiere and Northcut, 1997; Gray et al , 2001; Toms, 2002; Patten, 1991; Patten, 1992; Patten, 2002). In developed countries, the level of CSRD is higher than in developing countries (Kamla, 2007; Rizk et al , 2008; Uwuigbe and Egbide, 2012; De Villiers and Marques, 2016; Jamali and Karam, 2016; Bt Abdul et al , 2017). In this case, in most Arab countries, CSRD is low, such as Bahrain, Egypt, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, Syria, the United Arab Emirates and Yemen (Kamla, 2007; Alawi and Rahman, 2011); this may be a result of recent low economic development, weak legal systems, and corporate governance being a new concept or low demand from stakeholders.…”