Abasyn Journal of Social Sciences. Vol.8 No.2

The Relationship between Corporate Governance and Corporate Social Responsibility (CSR) Disclosure: Evidence from the USA

Syed Umar Farooq1 , Subhan Ullah2, Danson Kimani3

1 Professor, Abasyn University, Peshawar
2 Lecturer in Accounting and Finance, Nottingham Business School, Nottingham Trent University, UK.
3 PhD student, The Open University, United Kingdom.



 



Abstract
For the past twenty years, researchers have extensively debated the determinants of good corporate governance practices and relationship between corporate governance and firm  performance. Nevertheless, relationship between corporate governance and corporate social responsibility has received minimal attention in the extant literature. This study thus seeks to fill this dearth by examining the relationship between corporate governance mechanisms and CSR using a sample of 247 US based firms for the period 2007-2011. Using a random-effects panel data model, we find that firms with strong internal corporate governance characteristics – compliant with the corporate governancecode – are likely to invest more in their CSR activities. We  conclude based on the paper’s findings that, larger firms tend to care more about their external market reputation relative to small firms; whilst the former’s CSR investment is also likely to have a significant positive association with their corporate image. In addition, larger firms tend to have more resources compared to small and medium firms, in terms of capital and talent; and hence they are capable of making huge investments in CSR activities.
Keywords: Corporate Governance, Corporate Social Responsibility, Disclosure Level

Received

Received Revised

Accepted

Available Online


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