Determinants of CSR disclosure: an evidence from India

Abstract

PurposeThis paper aims to undertake an empirical investigation on firm characteristics determining corporate social responsibility (CSR) disclosure and its subcategories such as environmental, social and governance disclosures.Design/methodology/approachThe sample consisted of listed companies in BSE 500 index for a period of 10 years from 2007 to 2016. Panel data regression method is used for the analysis. Seven variables are analyzed, namely, firm age, financial leverage, firm size, foreign ownership, promoter ownership, export performance, innovation and firm popularity.FindingsThe result shows that firm age and financial leverage are positively influencing CSR, environmental and social disclosure score but both are negatively influencing governance score. Firm size is positively associated with all four disclosure scores. Among ownership variables, foreign ownership shows a positive influence and promoters ownership shows a negative influence towards CSR, environment and social disclosures. No association is found between both ownership variables and governance disclosure score. Further analysis also finds that there is a difference in this relationship during crisis period.Research limitations/implicationsThe study focuses only on listed companies in Indian capital market. In terms of implication, theoretical bases discussed in the literature review and hypotheses development are mostly validated.Practical implicationsThe findings are important for the firm, stakeholders and policymakers. A firm may think about appointing experts in CSR to spend the amount wisely and improve CSR disclosure to compete in the international market; stakeholders have to pressure the firm to provide more CSR disclosure and for policymakers this study study provides useful inputs to design legal framework on CSR.Originality/valueThe measurement of CSR disclosure using environmental, social and governance (ESG) score is novel in Indian context, even though the methodology is often used in literature.