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When Does Corporate Social Responsibility Disclosure Affect Investment Efficiency? A New Answer to an Old Question

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  • Rehana Anwar
  • Jaleel A. Malik

Abstract

Prior evidence that firm’s investment behavior is positively affected by its corporate social responsibility (CSR) disclosure, as one of the key CSR areas of the company, leaves unaddressed whether all kinds of disclosure have the same effect. Drawing on stakeholder theory, this study analyzes the issue in a more exhaustive way. A cross-sectional logistic regression model is used to test the hypothesized association, and the results imply that firms’ high (low)-quality disclosure regarding their engagement in CSR activities increases their chances of being from the investment-efficient (inefficient) group. The obtained results conclude that CSR reporting activity is not beneficial for companies unless a meaningful disclosure of sustainability information is made. Our results are robust to using alternative proxies for CSR disclosure quality. This study contributes to the scarce evidence on CSR reporting in Pakistan and provides a useful method for assessing quality of CSR reports.

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  • Rehana Anwar & Jaleel A. Malik, 2020. "When Does Corporate Social Responsibility Disclosure Affect Investment Efficiency? A New Answer to an Old Question," SAGE Open, , vol. 10(2), pages 21582440209, June.
    • Handle: RePEc:sae:sagope:v:10:y:2020:i:2:p:2158244020931121
    DOI: 10.1177/2158244020931121
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    2. Maha Faisal Alsayegh & Rashidah Abdul Rahman & Saeid Homayoun, 2022. "Corporate Sustainability Performance and Firm Value through Investment Efficiency," Sustainability, MDPI, vol. 15(1), pages 1-13, December.
    3. Iman Harymawan & Mohammad Nasih & Dian Agustia & Fajar Kristanto Gautama Putra & Hadrian Geri Djajadikerta, 2022. "Investment efficiency and environmental, social, and governance reporting: Perspective from corporate integration management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1186-1202, September.

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