Carroll’s dimensions and CSR disclosure: empirical evidence from Pakistan

Abstract

Purpose This study aims to ascertain the relevance of Carroll’s four dimensions of corporate social responsibility (CSR), namely, economic, legal, ethical and discretionary in a dynamic regulatory context of a developing economy – Pakistan. Design/methodology/approach This study has operationalized these dimensions as four categories of CSR disclosure index. This disclosure index measured the relevance of CSR dimensions by examining CSR disclosure practices of Pakistan Stock Exchange-100 index firms. Findings The authors have found that the firms of Pakistan disclose more information pertaining to discretionary dimension of CSR than economic, legal and ethical dimensions. Interestingly, the authors have observed that after the enactment of state regulation, there is an increasing trend of the overall CSR disclosure level at a decreasing rate. Practical implications For policymakers, these findings imply that firms tend to perceive law as a box-ticking exercise and refrain to involve in those CSR activities that can have both strategic and societal benefits over the long run. These finding imply for business managers that if they will not undertake CSR notion seriously then the policymakers will take statutory initiatives to curtail the greenwashing effect and these initiatives can lead to higher transaction costs. Originality/value This study presents evidence about the relevance of Carroll’s four dimensions of CSR in a developing economy. The evidence shows that the CSR disclosure in developing economy continues to take a largely philanthropic form thereby dominating other CSR dimensions namely ethical, legal and economic. These findings also confirm that CSR practices are context-dependent and these cannot be isolated from their unique social context.