Open AccessThe Nexus between Corporate Social Responsibility Disclosure and Financial Performance: Evidence from the Listed Banks, Finance and Insurance Companies in Sri Lanka
Author(s) -
J. Aloy Niresh,
W. H. E. Silva
Publication year - 2018
Publication title -
accounting and finance research
Language(s) - English
Resource type - Journals
eISSN - 1927-5994
pISSN - 1927-5986
DOI - 10.5430/afr.v7n2p65
Subject(s) - corporate social responsibility , nexus (standard) , return on equity , accounting , leverage (statistics) , business , corporate governance , return on assets , sri lanka , finance , social responsibility , equity (law) , stock exchange , economics , public relations , machine learning , socioeconomics , political science , computer science , law , tanzania , embedded system
The nexus between Corporate Social Responsibility Disclosure (CSRD) and financial performance is an ongoing debate and a puzzle encountered by business organizations. This study is an attempt to address the question of whether CSRD is linked to financial performance of companies quoted on the Banks, Finance and Insurance sector in Sri Lanka. The sample includes only the companies that devote a separate section to disclose Corporate Social Responsibility (CSR) activities in their annual reports as failure to disclose CSR in the annual reports will have a material effect on findings. Corporate Financial Performance (CFP) is measured through the use of Return on Assets (ROA) and Return on Equity (ROE) controlled for size and leverage. Content analysis was utilized to develop the Corporate Social Responsibility Disclosure Index (CSRDI). Two multiple regression models were analyzed using Stata. Findings of the study revealed that there is a significant association between Corporate Social Responsibility Disclosure and future financial performance of the selected listed banks, finance and insurance companies in Sri Lanka.