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The effects of reporting frameworks and a company’s financial position on managers’ willingness to invest in corporate social responsibility projects
Author(s) -
Chen Yasheng,
Jermias Johnny,
Nazari Jamal A.
Publication year - 2021
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12706
Subject(s) - corporate social responsibility , business , position (finance) , dilemma , accounting , investment (military) , financial statement , investment decisions , finance , public relations , behavioral economics , philosophy , audit , epistemology , politics , political science , law
This study examines how companies’ voluntary adoption of a particular CSR framework affects their managers’ decision‐making, especially when they are faced with a dilemma whereby maximising environmental benefits means a reduction in financial returns. The results show that investment in CSR projects is significantly higher when companies report under a stand‐alone CSR reporting framework, as this framework provides the opportunity to highlight the benefits of CSR investment. In contrast, an integrated reporting framework encourages disclosure of benefits and costs, whereas the financial statement framework limits disclosure of CSR activities, and both result in lower investment in CSR projects.