Abstract
Corporate Social Responsibility (CSR) disclosure has become a rising concern for the public listed firms worldwide due to its ability to enhance firm’s market performance and financial performance. The main objective of this study is to investigate the relationship between CSR disclosure and firm performance of Bursa Malaysia’s listed companies based on their market value added (MVA), return on equity (ROE) and return on assets (ROA). 324 samples of public listed companies’ annual report for the period of 2014 to 2016 were obtained from Bursa Malaysia and examined. The extent of their CSR disclosure were measured and analyzed. After accounting for control variables such as firm size, firm age, firm leverage and firm liquidity, the result shows that there is a positive significant relationship between CSR disclosure and firm performance in terms of ROA and ROE. This reveals that high level of CSR disclosure helps firms to achieve optimum performance through increased competitiveness, improved firm’s image amongst society, and creates new opportunities in the marketplace. The findings also showed mix results among the control variables towards firm performance. For future research, this paper recommends to extend the study by using different CSR disclosure measurement, different firm performance measurement such as return on investments (ROI) and Tobin’s Q and different samples.
Highlights
For many years, there has been a significant growth in the awareness and practices of Corporate Social Responsibility (CSR) disclosure worldwide
Siminica, and Circiumaru (2010) have used ratio of change in market value added of the year to total equity of the year to measure MVA
MVA is used to measure market-based performance which calculated by measured by ratio of change in market value added of the year to total equity of the year
Summary
There has been a significant growth in the awareness and practices of Corporate Social Responsibility (CSR) disclosure worldwide. CSR disclosure has been a rising concern for the public listed companies as Malaysia is one of the emerging capital markets. On 14th December 2006, Bursa Malaysia requires all listed companies to report their CSR actions in their annual report (Bursa Malaysia Securities Berhad, 2015). Bursa Malaysia has prepared a CSR framework in 2006 that acts as a guideline for listed companies to report their CSR activities and practices. The practice of CSR in Malaysia is completely voluntary and not mandatory, the disclosure of CSR activities is known to provide better transparency. As a result many companies in Malaysia are actively engaging themselves with CSR activities to meet the requirement, and to gain corporate image and competitive advantage. As one of the mobile communication firms in Malaysia has well practice CSR disclosure. DiGi had been awarded the “Best overall CSR Programme” in Prime Minister’s CSR Awards in 2007 for its efforts and contributions to the society through CSR activities (Wahari, 2007)
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