A Multimethod Approach to Assess and Measure Corporate Social Responsibility Disclosure and Practices in a Developing Economy

Mian Nazir,Qasim Raza Khan,Ishfaq Ahmed,Samya Tahir,Mohammad Nurunnabi,Sadaf Ehsan

doi:10.3390/su10082955

Abstract

Disclosures on Corporate Social Responsibility (CSR) practices of business organizations have heightened over the past few decades due to increased awareness. Major contributions in the literature on CSR practices and their disclosures come from the studies conducted in the developed world, while many developing economies like Pakistan remain under-researched and fewer revelations have been made about their CSR practices. Therefore, the present study aims to explore various aspects of CSR practices of Pakistani firms and their reporting trends. A multimethod approach has been adopted to measure CSR practices with respect to both approaches, quantitative and qualitative, for 170 listed firms from 2008 to 2015. First, content analysis is employed to develop a CSR Disclosure Index (CSRD Index) as well as five sub indices, i.e., community welfare, health and education, environment and energy, product, and customer and workforce. Second, a multidimensional financial approach is used to calculate firm’s CSR monetary spending ratio (CSR-MSR) using the monetary data of CSR activities. Results suggested that most Pakistani firms disclose more information about their product-, customer-, and stakeholder-related CSR activities and put less emphasis on health and education responsibilities. Moreover, there is a strong impact of government reforms on both the firm’s CSR disclosures and monetary giving.

Highlights

In recent years, the concept of Corporate Social Responsibility (CSR) emerged as one of the most important concerns for management and has become the important subject of scholarly debate [1]
Frynas [20] argued that this area of research has not been fully developed because of the differences in CSR disclosure practices between developed and developing economies, which can be attributed to differences in their context [21]
Keeping in view the aforementioned gap in the literature on CSR in developing countries, the present study aims to contribute in the literature of CSR on developing countries by increasing the understanding about CSR practices and their disclosures using the case of Pakistan

Summary

Introduction

The concept of Corporate Social Responsibility (CSR) emerged as one of the most important concerns for management and has become the important subject of scholarly debate [1]. What should and should not be included in order to establish the comprehensive and indicative measure of CSR is still a debatable question for academics, researchers, and policy-makers [14,15] These criticalities exist because most of these studies do not incorporate the contextual factors that can influence the CSR practices of firms [16,17] and their measurement. Frynas [20] argued that this area of research has not been fully developed because of the differences in CSR disclosure practices between developed and developing economies, which can be attributed to differences in their context [21] Another potential reason for this lack of CSR research in the context of developing countries is due to less pressure from public, regulatory bodies, and domestic actors on business organizations to disclose information about their CSR practices [20,22]. The final section concludes the overall study, gives policy implications, and suggests some recommendations for future research

Corporate Social Responsibility in Pakistani Context

Review of Existing Approaches to Measure CSR

Questionnaire Survey

Single-Dimension-Based Measure of CSR

Methodology

Disclosure Approach

Sampling Units

Coding Units or Unit of Analysis

Development of Themes or Categories

CSR Disclosure Indices

Reliability of the CSR Disclosure Index

Multidimensional Financial Approach