The influence of social disclosure on the relationship between Corporate Financial Performance and Corporate Social Performance*

Abstract

ABSTRACTis study's general objective is to investigate the moderating e ect of Corporate Social Performance Disclosure (D-CSP) on the relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP). Based on this objective, the study presented a model in which D-CSP acts as a moderator in relation to primary stakeholders (employees, community, and suppliers). D-CSP is a mechanism through which the various social aspects involved in discretionary policies, actions, and activities identi ed in the management for stakeholders process can be evaluated. A sample of 1,147 companies belonging to 10 di erent sectors and ve continents was used to test the model. Data were collected from the Bloomberg database, totaling 5,735 observations, from 2010 to 2014. e relationship was tested using the multiple linear regression model involving panel data with xed e ects, and the Newey-West robust standard errors correction. ree constructs, D-CSP, CSP, and CFP, were used to perform the tests. As a CSP measure, the CSP of the employee, supplier, and community stakeholders was used. As a D-CSP measure, the CSP disclosure scores available from the database were used, and return on assets (ROA) was used as a CFP measure. e tests carried out indicated the existence of a positive moderating e ect of disclosure on the relationship between the CSP of primary stakeholders and CFP. Besides presenting a positive CSP in relation to the primary stakeholders the results enable it to be inferred that these results need to be disclosed, thus contributing to higher corporate nancial performance.

The Impact of CEO Duality and Financial Performance on CSR Disclosure: Empirical Evidence from State-Owned Enterprises in China

“…We find a positive and significant coefficient (t = 4.00, p < 0.000) of financial performance which suggests that financial performance affects the quality of CSR disclosure, in this way supporting hypothesis (H2). This is in accordance with previous studies (Garcia et al 2018;Nelling and Webb 2009;Salehi et al 2018;Sial et al 2018;Zu and Song 2009).…”

“…The principal investor of a company is its shareholders, who are worried about the firm's profits. From a justice viewpoint, a firm with better financial performance is more able to exhibit its social and public responsibilities and to avoid litigations; in the case of institutional regulations, they provide a more extensive report of CSR activities (Cho and Patten 2007;Garcia et al 2018;Ng and Koh 1994). This claim recommends financial performance to be positively associated with CSR disclosure.…”

Exploring the Moderating Role of Social and Ethical Practices in the Relationship between Environmental Disclosure and Financial Performance: Evidence from ESG Companies

“…ESG firms values the importance of the ethical engagement to reflect their faithful image towards all the stakeholders and values the importance of transparent and reliable communication [14]. Several authors claim that business ethics rooted within the company way of life has a tremendous impact on the FP and ED [15]. In different phrases, to restrict the problems of agencies, corporate executives are advocated to strengthen sustainability practices based on moral concepts.…”

“…Vourvachis et al [19] postulate that CSR is considered as a crucial subject matter in many fields. Additionally, according to Garcia et al [15] and Karim et al [20], several primarily market-based incentives, were initiated to inspire corporations to conduct ED.…”

Disclosure of social responsibility and the competitive advantage at Sudan industrial companies

“…Dropulić and Cular (2019) examined various corporate social responsibility initiatives undertaken by insurance companies in Croatia and their effect on reporting quality. They found that insurance and reinsurance companies in Croatia do not have a high level of corporate social responsibility online disclosure Garcia et al (2018) investigated the influence of social disclosure on the relationship between Corporate Financial Performance and Corporate Social Performance. They found that there is a positive moderating effect of disclosure on the relationship between the Corporate Social Performance of primary stakeholders and Corporate Financial Performance.…”