Corporate Social Responsibility and Dividend Policy: SMEs Listed in Bursa Malaysia

Background - A corporate social responsibility (CSR) concept has emerged in the decades started at the year of 1960s and brings forward to the 2000s. Recently, this area of research attracted much attention from academics and business professionals. CSR tends to overcome unethical conduct by a firm in dealings with their daily activities which may protect its outcome towards its stakeholders. By implementing CSR programs within firm overall activities, it will determine firm sustainability in the marketplace since the public foresees the firm as an entity that they can trust to protect them. Most firms choose to invest firm’s resources on CSR as a strategic choice to gain a competitive advantage, improve the firm’s image, for wealth creation and importantly is to increase the firm’s value. So far research on CSR much focused on the impact on overall firm performance. Notwithstanding, the scholars shifted their interest to more specific aspects of performance by investigating the CSR investment impact on dividend policy. Dividends are the most common payout device used in the distribution of a firm’s wealth. Thus, shareholders are demanded firm to act according to the main objective which is profit maximization while engaging with the CSR activities to protect all the stakeholders. Unfortunately, research on CSR practices affects on firm’s dividend policy among SMEs are less attention compared to large firms although SMEs play significant roles in the global market. Thus, this study tends to examine the relationship between CSR and dividend policy focusing on Malaysia SMEs listed in Bursa Malaysia as their responsibility are not mainly on maximizing shareholder’s wealth, as well as towards stakeholders. Purpose - The purpose of this study is to examine the impact of corporate social responsibility (CSR) on firm’s dividend policy focusing on Malaysia small and medium-sized enterprises (SMEs). Design/methodology/approach - This study is focused on Malaysian SMEs listed in Bursa Malaysia. A list of 52 Malaysian SMEs listed in Main Market and ACE Market is taken from the SMECorp website during the period from 2018 to 2022. Findings/Expected Contributions - This study expected to proposes a positive relationship between CSR and dividend policy through adoption of the agency and signaling theories. Based on agency theory, dividend payout uses as a monitoring mechanism in controlling the agency cost. Dividend payout reduces the firm resources available under the management's control and indirectly can minimize the potential for inefficient use of resources (Benlemih, 2019). Availability of cash in excess of internal funding might encourage the managers to increase the firm’s investment in CSR activities in order to maximize the firm’s value. In addition, Choi, (2019) agreed that managers with free cash flow tend to overinvest in CSR activities to prove their socially responsible person. Thus, firms with an optimal dividend policy help to minimize cash available for the managers and avoid overspending on CSR activities. Additionally, based on signaling theory, a firm’s announcement on dividend payout act as an indicator of a firm's prosperous future. Primarily, increased dividends describe the firm stability and growth with better investment opportunities. A high dividend payout firm signal the way management efficiently sustainably manages the firm’s resources by protecting the interest of stakeholders (Benlemih, 2019). Furthermore, it shows the way a firm distributed its wealth fairly and ethically through resources allocation that benefits both the firm and its stakeholders. Indirectly, firms signal to the market that additional expenditure allocated to the CSR investment activities does not affect the firm’s cash and can even add value to the firm. Research limitations - This study only focusing on Malaysia SMEs listed in Bursa Malaysia, thus the expected result may not be representing overall SMEs in Malaysia as well as entire capital market in Malaysia. Originality/value - This study aims to enrich additional knowledge by providing new insight from Malaysia's perspective since research on CSR and dividend policy is a new research area with less attention given by scholars. In addition, this study attempts to extend the knowledge on CSR implications on firm performance and provide insight to the SMEs on the outcome of CSR engagements o dividend policy. This study is expected to become a reference for SMEs in Malaysia in the process of improving their CSR engagements while maximizing their shareholder interest. Next, this study aims to provide information to regulators and policymakers in formulating the best practice of the CSR reporting framework for SMEs

Water Rationing, Water, Sanitation and Hygiene Practices and Social Distancing at the Time of the COVID-19 Pandemic: A Cross-Sectional Study of Melaka, Malaysia

As an uninterrupted water supply is crucial for water, sanitation and hygiene (WASH) practices, a water shortage exacerbates the propagation of communicable and often life-threatening diseases. Melaka, a water-stressed state in Malaysia, had to impose a two-month water rationing exercise amid the COVID-19 pandemic in early 2020. Taking advantage of these concurrent occurrences, this study thus examines the impact of water rationing on the state’s residents’ WASH practices during that time. In particular, it seeks to examine whether there has been any shift in their WASH performance during the periods of pandemic and rationing. It also analyzes the effect of external water collection activity during rationing on the residents’ social-distancing performance. This study collects its data from 120 respondents; the data are tested using non-parametric tests and frequency analyses. The results demonstrate that most of the respondents had a significant negative perception of how the rationing affected their WASH practices during the pandemic. Yet even with the ongoing rationing, their WASH levels of performance had recorded significant growth. They also viewed external water collection activities as detrimental to their social distancing performance