When quality matters! CSR disclosure and value creation

Document Type

Journal Article


Universiti Putra Malaysia


School of Business and Law




This article was originally published as: Darus, F., Mad, S., Nejati, M., & Yusoff, R.(2016)When Quality Matters! CSR Disclosure and Value Creation. International Journal of Economics and Management, 10(S2), 285-302. Original article available here


This paper examines corporate social responsibility (CSR) disclosure of financial institutions in Malaysia and investigates the influence of CSR disclosure quantity and quality on the value creation of a firm. Study sample includes 80 observations, comprising 20 financial institutions in Malaysia over a four-year period from 2008 to 2011. Content analysis was performed on the annual and sustainability reports to measure the CSR reporting among the financial institutions. The CSR reporting was measured in terms of both quantity and quality of information disclosed. A value-creation index, comprising both financial and non-financial measures, was developed to measure the resultant effect of such CSR information on creating value for the financial institutions. Results of this study provide evidence of an improvement in the quantity and quality of CSR disclosure among the financial institutions in Malaysia over the four-year period from 2008 to 2011, three years after the introduction of CSR framework to all Malaysian Public Listed Companies. Additionally, it was found that the concentration of the CSR activities among the financial institutions was towards the well-being of the community in which they operate. Study findings also indicate that quality of CSR disclosure matters more than quantity, as disclosure quality was found to be the only significant predictor of value creation for organizations. These findings have important implications, as they suggest that stakeholders require more non-financial information in order to evaluate social performance of a company. The positive link between the quality of CSR and value creation can create a bandwagon effect and encourage more firms to engage in the practice and disclosure of strategic CSR in line with their core business.

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