The impact of firm characteristics and internal and external contextual factors on corporate social responsibility disclosure: An empirical study of Thai publicly listed companies
Creators: name: Naowaratanajumnien, Taravut
Publisher: name: University of the Sunshine Coast, Queensland
Year: 2022
Subjects: corporate social responsiblity disclosure
corporate social responsiblity
corporate governance
sufficiency economy philosophy
business ethics
stakeholders' engagement
accountability
philanthropy
business sustainability
corporate social responsibility activites
Accounting, auditing and accountability

description: Corporate social responsibility (CSR) refers to a company’s voluntary contribution to fulfilling economic, social, environmental, and ethical responsibilities that go beyond legal requirements. During the last three decades, we have seen an increase in CSR disclosure (CSRD). The CSRD guidelines in emerging markets developed from practices and frameworks within the context of Western economies. However, there is growing consensus that CSR is highly contextual, varying across countries depending on cultural values, management perspectives, geographical locations, and religions. In addition, initial Thai CSRD studies have focused on the impact of environmental disclosure on CSRD and financial performance; later studies have examined the relationship between CSRD and financial performance. However, the results have been mixed. Thus, there may be other more important motives driving CSRD in Thailand.
description: The aim of the present study is to investigate the determinants of CSRD, namely, corporate characteristics and internal and external contextual factors. This study contributes to the literature on CSR by undertaking an empirical investigation of the CSRD of Thai listed companies during the voluntary period (i.e., before it was regularised in 2014). The focus is on the seven-year period from 2007 to 2013 with four interception periods: 2007, 2009, 2011, and 2013. To accomplish the aims of the study, a CSR checklist comprising 62 CSR-related activities under four categories was created. The purpose of such a checklist is to define the extent and nature of sample firms’ CSRD patterns. The data were obtained from 120 firms listed on the Stock Exchange of Thailand. Hypotheses were developed with reference to several theoretical constructs, namely, legitimacy, stakeholder, and institutional theories; the political cost hypothesis of positive accounting theory; and the ownership structure hypothesis derived from agency theory to explain the determinants of CSRD. Based on the results, CSRD is positively associated with company size, company profitability, industry, professional membership, and the sufficiency economy philosophy (SEP). However, CSRD is negatively associated with foreign ownership, suggesting either that foreign owners are focused on short-term investments or that they are not in favour of CSRD. Moreover, the findings indicate that the level of CSRD has increased over the sample period, except for 2009. This could be due to the impact of the global financial crisis and the political turmoil in Thailand in 2008. The findings also indicate that regardless of their profitability, Thai firms contributed to the 2011 flood relief efforts in several ways. Other factors, such as institutional shareholders and ownership concentration, do not impact CSRD.
description: The study also tests the robustness of the model by examining its response to changing independent variable conditions. These include classifying agriculture as an environmentally sensitive industry, categorising firm size as a dichotomous variable, winsorising the outliers with standard residual values of more than ± 2 to upper and lower-bound values, and removing outliers. Broadly, the results of these tests are similar to the regression results of the main model. Besides the robustness testing, the study incorporates further analysis of the separate categories of CSRD.
description: This study contributes to the CSR literature in several ways. First, it adds to the extant literature by developing a new measurement that considers all the dimensions of CSRD. Second, it extends empirical evidence on the determinants of CSRD in the context of a developing country like Thailand. Finally, the results add to the evidence regarding the distinct factors that can determine CSRD dimensions such as ownership concentration, institutional shareholders, foreign shareholders, the SEP, industry, professional membership, firm size, profitability, and a natural disaster.