Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no8.0453

The Effect of Corporate Social Responsibility Disclosure on Market Performance: Evidence from Jordan  

ZRAQAT, Omar (Accounting Department, Jerash University)
ZUREIGAT, Qasim (Sulaiman AlRajhi School of Business, Sulaiman AlRajhi University)
AL-RAWASHDEH, Hani Ali (Accounting Department, Jerash University)
OKOUR, Samer Mohammed (Accounting Department. The World Islamic Sciences and Education University)
HUSSIEN, Lina Fuad (Accounting Department, Jerash University)
AL-BAWAB, Atef Aqeel (Accounting Department, Middle East University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.8, 2021 , pp. 453-463 More about this Journal
Abstract
The current study aims to investigate the relationship between CSRD and firm performance, as an indicator for corporate socially responsible behavior, and corporate market performance of listed companies on the Amman stock exchange (ASE). The study adopts a quantitative methodology and utilizes pooled data sets that was collected following content analysis approach of the annual reports for the period 2014 to 2019. The study sample consists of 42 listed companies. The study ran a multiple regression model in order to capture the relationship between the independent variable CSRD and the dependent variable that is Firm performance which was measured using Tobin's Q. The study also utilized five control variables in order to control the hypothesized relationship between CSRD and Firm Performance. The results indicate a negative but significant relationship between CSRD and corporate market performance measured by Tobin's Q. The results stand against the notion of the business case for CSR, and indicate the opposite position, so, the higher CSRD, the lower will be Tobin's Q. Such results support the notion of the institutional theory, and provide an initial evidence for legitimacy seeking behavior in Jordanian companies. However, the results indicate a lower level of awareness of CSR across investors and market players, which support arguments of the difference in market perceptions towards CSR.
Keywords
Corporate Social Responsibility Disclosure; Market Performance; Institutional Theory; Jordan;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Wahidahwati, W., & Ardini, L. (2021). Corporate Governance and Environmental Performance: How They Affect Firm Value. The Journal of Asian Finance, Economics and Business, 8(2), 953-962. https://doi.org/10.13106/jafeb.2021.vol8.no2.0953   DOI
2 Bani-Khaled, S. M., El-Dalabeea, A. R. K., Al-Olimat, N. H., & Al-Shbail, M. O. (2021). Relationship Between Corporate Social Responsibility Expenditures and Performance in Jordanian Commercial Banks. The Journal of Asian Finance, Economics and Business, 8(3), 539-549. https://doi.org/10.13106/jafeb.2021.vol8.no3.0539   DOI
3 Baronov, D. (2012). Conceptual foundations of social research methods (2nd ed.). London: Routledge. https://doi.org/10.4324/9781315636436
4 Berger, I. E., Cunningham, P. H., & Drumwright, M. E. (2007). Mainstreaming corporate social responsibility: Developing markets for virtue. California Management Review, 49(4), 132-157. https://doi.org/10.2307/41166409   DOI
5 Buallay, A. M., Hamdan, A. M. M., Zureigat, Q., & Dhaen, E. S. A. (2019). Does voluntary disclosures contributed to the intellectual capital efficiency?. International Journal of Learning and Intellectual Capital, 16(2), 145-179. https://doi.org/10.1504/IJLIC.2019.098899   DOI
6 Aribi, Z. A., & Gao, S. (2010). Corporate social responsibility disclosure: A comparison between Islamic and conventional financial institutions. Journal of Financial Reporting and Accounting, 8(2), 72-91. https://doi.org/10.1108/19852511011088352   DOI
7 Castello, I., & Lozano, J. M. (2011). Searching for new forms of legitimacy through corporate responsibility rhetoric. Journal of Business Ethics, 100(1), 11-29. https://doi.org/10.1007/s10551-011-0770-8   DOI
8 Buallay, A., Hamdan, A., & Zureigat, Q. (2017). Corporate governance and firm performance: evidence from Saudi Arabia. Australasian Accounting, Business and Finance Journal, 11(1), 78-98. http://dx.doi.org/10.14453/aabfj.v11i1.6   DOI
9 Hardiningsih, P., Januarti, I., Yuyetta, E. N. A., Srimindarti, C., & Udin, U. (2020). The effect of sustainability information disclosure on financial and market performance: Empirical evidence from Indonesia and Malaysia. International Journal of Energy Economics and Policy, 10(2), 18-25. https://doi.org/10.32479/ijeep.8520   DOI
10 Liu, Y., Saleem, S., Shabbir, R., Shabbir, M. S., Irshad, A. & Khan, S. (2021). The relationship between corporate social responsibility and financial performance: A moderate role of fintech technology. Environmental Science and Pollution Research, 28(16), 20174-20187. https://doi.org/10.1007/s11356-020-11822-9   DOI
11 Zmijewski, M. E. (1984). Methodological issues related to the estimation of financial distress prediction models. Journal of Accounting Research, 22, 59-82. https://doi.org/10.2307/2490859   DOI
12 Pekovic, S., & Vogt, S. (2021). The fit between corporate social responsibility and corporate governance: the impact on a firm's financial performance. Review of Managerial Science, 15(4), 1095-1125. https://doi.org/10.1007/s11846-020-00389-x   DOI
13 Carroll, A. B. (2008). A history of Corporate Social Responsibility: Concepts and Practices. In: Crane, D. M. A., McWilliams, A., Moon, J., & Siegel, D. S. (Eds.), The Oxford Handbook of Corporate Social Responsibility (pp. 19-46): Oxford University Press. https://doi.org/10.1093/oxfordhb/9780199211593.003.0002
14 Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1-23. https://doi.org/10.1002/smj.2131   DOI
15 Davis, K. (1960). Can business afford to ignore social responsibilities?. California Management Review, 2(3), 70-76. https://doi.org/10.2307/41166246   DOI
16 Schreck, P. (2011). Reviewing the business case for corporate social responsibility: New evidence and analysis. Journal of Business Ethics, 103(2), 167-188. https://doi.org/10.1007/s10551-011-0867-0   DOI
17 Torelli, R., Balluchi, F., & Furlotti, K. (2020). The materiality assessment and stakeholder engagement: A content analysis of sustainability reports. Corporate Social Responsibility and Environmental Management, 27(2), 470-484. https://doi.org/10.1002/csr.1813   DOI
18 Liang, H., & Renneboog, L. (2018). Is corporate social responsibility an agency problem?. In: Research Handbook of Finance and Sustainability. Edward Elgar Publishing., Cheltenham, 54-71. https://doi.org/10.4337/9781786432636.00010
19 Wood, D. (1991). Corporate Social Performance Revisited. Academy of Management. The Academy of Management Review, 16(4), 691-718. https://www.jstor.org/stable/258977   DOI
20 Worokinasih, S., & Zaini, M. L. Z. B. M. (2020). The Mediating Role of Corporate Social Responsibility (CSR) Disclosure on Good Corporate Governance (GCG) and Firm Value. A Technical Note. Australasian Accounting, Business and Finance Journal, 14(1), 88-96. http://dx.doi.org/10.14453/aabfj.v14i1.9   DOI
21 Zraqat, O. M. (2019). Sustainability Practices Disclosure and Value Relevance: Evidence from Jordan. Modern Applied Science, 13(9), 75-86. https://doi.org/10.5539/mas.v13n9p75   DOI
22 Zraqat, O. M. (2020). The Effect of Voluntary Disclosure on the Cost of Capital: Evidence from Jordan. European Journal of Scientific Research, 157(1), 17-26.
23 Majeed, S., Aziz, T., & Saleem, S. (2015). The effect of corporate governance elements on corporate social responsibility (CSR) disclosure: An empirical evidence from listed companies at KSE Pakistan. International Journal of Financial Studies, 3(4), 530-556. https://doi.org/10.3390/ijfs3040530   DOI
24 Hunjra, A. I., Zureigat, Q., & Mehmood, R. (2020). Impact of capital regulation and market discipline on capital ratio selection: A cross country study. International Journal of Financial Studies, 8(2), 21. https://doi.org/10.3390/ijfs8020021   DOI
25 Easterby-Smith, M., Jaspersen, L. J., Thorpe, R., & Valizade, D. (2018). Management and business research (6th ed.). Thousand Oaks, CA: Sage Publications.
26 Elbaz, J., & Laguir, I. (2014). Family Businesses and Corporate Social Responsibility (CSR) Orientation: A Study of Moroccan Family Firms. Journal of Applied Business Research (JABR), 30(3), 671. https://doi.org/10.19030/jabr.v30i3.8552   DOI
27 Garas, S., & ElMassah, S. (2018). Corporate governance and corporate social responsibility disclosures. Critical Perspectives on International Business, 14(1), 2-26. https://doi.org/10.1108/cpoib-10-2016-0042   DOI
28 El Ghoul, S., Guedhami, O., Kwok, C. C., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital. Journal of Banking & Finance, 35(9), 2388-2406. https://doi.org/10.1016/j.jbankfin.2011.02.007   DOI
29 Davis, K. (1967). Understanding the social responsibility puzzle. Business horizons, 10(4), 45-50. https://doi.org/10.1016/0007-6813(67)90007-9   DOI
30 Ebire, K., Mukhtar, S. S., & Onmonya, L. (2018). Effect of dividend policy on the performance of listed oil and gas firms in Nigeria. International Journal of Scientific and Research Publications, 8(6), 289-302. http://dx.doi.org/10.29322/IJSRP.8.6.2018.p7837   DOI
31 Eldalabeeh, A. R., Al-Shbail, M. O., Almuiet, M. Z., Bany Baker, M., & E'leimat, D. (2021). Cloud-Based Accounting Adoption in Jordanian Financial Sector. The Journal of Asian Finance, Economics and Business, 8(2), 833-849. https://doi.org/10.13106/jafeb.2021.vol8.no2.0833   DOI
32 Firmansyah, A., Husna, M., & Putri, M. (2021). Corporate Social Responsibility Disclosure, Corporate Governance Disclosures, and Firm Value in Indonesia Chemical, Plastic, and Packaging Sub-Sector Companies. Accounting Analysis Journal, 10(1), 9-17. https://doi.org/10.15294/aaj.v10i1.42102   DOI
33 Haniffa, R., & Hudaib, M. (2006). Corporate governance structure and performance of Malaysian listed companies. Journal of Business Finance & Accounting, 33(7-8), 1034-1062. https://doi.org/10.1111/j.1468-5957.2006.00594.x   DOI
34 Jamali, D., & Karam, C. (2018). Corporate social responsibility in developing countries as an emerging field of study. International Journal of Management Reviews, 20(1), 32-61. https://doi.org/10.1111/ijmr.12112   DOI
35 Mahmood, M., & Orazalin, N. (2017). Green governance and sustainability reporting in Kazakhstan's oil, gas, and mining sector: Evidence from a former USSR emerging economy. Journal of Cleaner Production, 164, 389-397. https://doi.org/10.1016/j.jclepro.2017.06.203   DOI
36 Joo, J.-H. (2020). A mediating role of social capital between corporate social responsibility and corporate reputation: Perception of local university on CSR of KHNP. The Journal of Industrial Distribution & Business, 11(3), 63-71. https://doi.org/10.13106/jidb.2020.vol11.no3.63   DOI
37 Jamali, D., Zanhour, M., & Keshishian, T. (2009). Peculiar strengths and relational attributes of SMEs in the context of CSR. Journal of Business Ethics, 87(3), 355-377. https://doi.org/10.1007/s10551-008-9925-7   DOI
38 Khan, M. Y., Javeed, A., Cuong, L. K., & Pham, H. (2020). Corporate Governance and Cost of Capital: Evidence from Emerging Market. Risks, 8(4), 104. https://doi.org/10.3390/risks8040104   DOI
39 Zureigat, Q. M. (2015). Factors associated with audit reports in Saudi Arabia. Global Journal of Management and Business Research, 14(5), 66-74. Retrieved from: https://journalofbusiness.org/index.php/GJMBR/article/view/1547
40 Kurucz, E. C., Colbert, B. A., & Wheeler, D. (2008). The business case for corporate social responsibility. The Oxford Handbook of Corporate Social Responsibility, 83-112. https://doi.org/10.1093/oxfordhb/9780199211593.003.0004
41 Margolis, J. D., & Walsh, J. P. (2003). Misery loves companies: Rethinking social initiatives by business. Administrative science quarterly, 48(2), 268-305. https://doi.org/10.2307/3556659   DOI
42 Miralles-Quiros, M. M., Miralles-Quiros, J. L., & Valente Goncalves, L. M. (2018). The value relevance of environmental, social, and governance performance: The Brazilian case. Sustainability, 10(3), 574. https://doi.org/10.3390/su10030574   DOI
43 Ramzan, M., Amin, M., & Abbas, M. (2021). How does corporate social responsibility affect financial performance, financial stability, and financial inclusion in the banking sector? Evidence from Pakistan. Research in International Business and Finance, 55, 101314. https://doi.org/10.1016/j.ribaf.2020.101314   DOI
44 Ntim, C. G., & Soobaroyen, T. (2013). Corporate governance and performance in socially responsible corporations: New empirical insights from a Neo-Institutional framework. Corporate Governance: An International Review, 21(5), 468-494. https://doi.org/10.1111/corg.12026   DOI
45 Panahaian, H., & Hosseini, M. (2013). The effects of performance criteria including accounting, market, and economy on the quality of financial reporting: A case study on Tehran Stock Exchange. Management Science Letters, 3(1), 107-118. https://doi.org/10.5267/j.msl.2012.11.009   DOI
46 Qa'dan, M. B. A., & Suwaidan, M. S. (2019). Board composition, ownership structure and corporate social responsibility disclosure: the case of Jordan. Social Responsibility Journal, 15(1), 28-46. https://doi.org/10.1108/SRJ-11-2017-0225   DOI
47 Bell, E., Bryman, A., & Harley, B. (2018). Business research methods. Oxford: Oxford University Press.
48 Adams, C. A., & Larrinaga-Gonzalez, C. (2007). Engaging with organisations in pursuit of improved sustainability accounting and performance. Accounting, Auditing & Accountability Journal, 20 (3), 333-355. https://doi.org/10.1108/09513570710748535   DOI
49 Alipour, M., Ghanbari, M., Jamshidinavid, B., & Taherabadi, A. (2019). Does board independence moderate the relationship between environmental disclosure quality and performance? Evidence from static and dynamic panel data. Corporate Governance: The International Journal of Business in Society, 19(3), 580-610. https://doi.org/10.1108/CG-06-2018-0196   DOI
50 Bajic, S., & Yurtoglu, B. (2018). Which aspects of CSR predict firm market value?. Journal of Capital Markets Studies, 2(1), 50-69. https://doi.org/10.1108/JCMS-10-2017-0002   DOI
51 Burlea, A., & Popa, I. (2013). Legitimacy Theory. Encyclopedia of Corporate Social Responsibility, 1579-1584. https://doi.org/10.1007/978-3-642-28036-8_471
52 Liu, X., & Zhang, C. (2017). Corporate governance, social responsibility information disclosure, and enterprise value in China. Journal of Cleaner Production, 142, 1075-1084. https://doi.org/10.1016/j.jclepro.2016.09.102   DOI
53 Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39-48. https://doi.org/10.1016/0007-6813(91)90005-G   DOI
54 Al Fadli, A. (2020). Corporate board and CSR reporting: Before and after analysis of JCGC 2009. Corporate Governance and Sustainability Review, 4(1), 21-32. https://doi.org/10.22495/cgsrv4i1p2   DOI
55 Carroll, A. B. (2015). Corporate social responsibility: The centerpiece of competing and complementary frameworks. Organizational Dynamics, 44(2), 87-96. https://doi.org/10.1016/j.orgdyn.2015.02.002   DOI
56 Carroll, A. B., & Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 12(1), 85-105. https://doi.org/10.1111/j.1468-2370.2009.00275.x   DOI
57 Kumar, R. (2009). Post-merger corporate performance: an Indian perspective. Management Research News, 32(2), 145-157. https://doi.org/10.1108/01409170910927604   DOI
58 Lease, R. C., McConnell, J. J., & Mikkelson, W. H. (1983). The market value of control in publicly-traded corporations. Journal of Financial Economics, 11(1-4), 439-471. https://doi.org/10.1016/0304-405X(83)90019-3   DOI
59 Li, Q., Luo, W., Wang, Y., & Wu, L. (2013). Firm performance, corporate ownership, and corporate social responsibility disclosure in China. Business Ethics: A European Review, 22(2), 159-173. https://doi.org/10.1111/beer.12013   DOI
60 Carini, C., Comincioli, N., Poddi, L., & Vergalli, S. (2017). Measure the performance with the market value added: Evidence from CSR companies. Sustainability, 9(12), 2171. https://doi.org/10.3390/su9122171   DOI
61 Omar, B. F., & Zallom, N. O. (2016). Corporate social responsibility and market value: evidence from Jordan. Journal of Financial Reporting and Accounting, 14(1), 2-29. https://doi.org/10.1108/JFRA-11-2014-0084   DOI
62 Malik, M. S., & Kanwal, L. (2018). Impact of corporate social responsibility disclosure on financial performance: case study of listed pharmaceutical firms of Pakistan. Journal of Business Ethics, 150(1), 69-78. https://doi.org/10.1007/s10551-016-3134-6   DOI
63 Matten, D., & Moon, J. (2008). "Implicit" and "explicit" CSR: A conceptual framework for a comparative understanding of corporate social responsibility. Academy of Management Review, 33(2), 404-424. https://doi.org/10.5465/amr.2008.31193458   DOI
64 Saunders, M., Lewis, P., & Thornhill, A. (2016). Research methods for Business Students (4th ed.). England: Pearson Education Limited.
65 McWilliams, A., Siegel, D. S., & Wright, P. M. (2006). Corporate social responsibility: Strategic implications. Journal of Management Studies, 43(1), 1-18. https://doi.org/10.1111/j.1467-6486.2006.00580.x   DOI
66 Miras-Rodriguez, M. D. M., Martinez-Martinez, D., & EscobarPerez, B. (2019). Which corporate governance mechanisms drive CSR disclosure practices in emerging countries. Sustainability, 11(1), 61. https://doi.org/10.3390/su11010061   DOI
67 Neuendorf, K. A. (2018). 18 Content analysis and thematic analysis. In: Advanced Research Methods for Applied Psychology: Design, Analysis and Reporting, 211.
68 Nunhes, T. V., Bernardo, M., & Oliveira, O. J. D. (2020). Rethinking the way of doing business: A reframe of management structures for developing corporate sustainability. Sustainability, 12(3), 1177. https://doi.org/10.3390/su12031177   DOI
69 Suddaby, R. (2010). Challenges for institutional theory. Journal of Management Inquiry, 19(1), 14-20. https://doi.org/10.1177/1056492609347564   DOI
70 Soufeljil, M., Sghaier, A., Kheireddine, H., & Mighri, Z. (2016). Ownership structure and corporate performance: The case of listed Tunisian firms. Journal of Business & Financial Affairs, 5(4), 1-8. https://doi.org/10.4172/2167-0234.1000222   DOI
71 Tibiletti, V., Marchini, P. L., Furlotti, K., & Medioli, A. (2021). Does corporate governance matter in corporate social responsibility disclosure? Evidence from Italy in the "era of sustainability". Corporate Social Responsibility and Environmental Management, 28(2), 896-907. https://doi.org/10.1002/csr.2097   DOI
72 Aureli, S., Gigli, S., Medei, R., & Supino, E. (2020). The value relevance of environmental, social, and governance disclosure: Evidence from Dow Jones Sustainability World Index listed companies. Corporate Social Responsibility and Environmental Management, 27(1), 43-52. https://doi.org/10.1002/csr.1772   DOI