Corporate social responsibility disclosure and financial performance: evidence from Thailand

p\u3eCorporate social responsibility (CSR) has become a strategic agenda for businesses in many countries. The (CSR) disclosure practices have been developed over the last three decades in the area of financial reporting. Many (CSR) practices in emerging markets emerged from practices and frameworks of developed countries. The number of CSR frameworks and principles has considerably increased both in academic and business environments. In Thailand, most of the CSR concepts and principles are also developed based on the framework of developed countries but they still remain a voluntary mechanism. However, there are momentous differences between Thai and other developed countries’ context in implementing CSR practices. These differences include many factors: culture, natural business systems, and geographical aspects. The application of CSR disclosures in Thailand still remains in embryonic form. Thus, this study’s main purpose is to investigate the extent of CSR disclosures by Thai public listed companies, in particular, identifying the current practices of CSR disclosures, and the relationship between the level of CSR disclosures and firm financial performance from 2009 to 2011. To investigate such a relationship, a CSR checklist is developed to identify CSR practices in Thai companies. In developing a CSR checklist, the published annual reports are analysed for the frequency of CSR practices. A dichotomous process was utilised to develop an index based on five CSR dimensions including: environment, energy, employee, community and product dimensions. This CSR checklist covered 45 CSR activities of Thai companies. CSR disclosures are then analysed and examined using content analysis. The second objective of this study is to examine the relationship between the extent of CSR disclosure and financial performance (FP) of Thai listed firms. The sample data used in this study comprises 323 companies listed on the Stock Exchange of Thailand (SET). The period of the study is selected for three years from 2009 to 2011. This particular period was chosen because my PhD started in 2011 and Thai studies on CSR disclosure and financial performance using post global financial crisis after 2008 are fairly limited. CSR practices, financial performance and firms’ specific characteristics are obtained from companies’ annual reports and SETSMART database. The considered variables are CSR index, financial performance measures. The financial performance measures include: ROA, NPM, EPS and TBQ. The considered control variables are firm size, firm leverage, company age and the percentage of independent directors on companies’ boards. Three groups of data are examined separately by four regression models including cross-sectional model, the pooled ordinary least squares model, the random effects model and the fixed effects model. This study has tested the results for their robustness using two stages least square (2SLS). The findings from the CSR disclosure analysis show that Thai companies are more likely to disclose CSR information regarding community and employee information. These two categories are the most disclosed CSR themes in the Thai context. However, energy disclosure is the least disclosed theme by Thai companies. Furthermore, by comparing each industry, the results indicate that all industries tend to disclose CSR activities under community information rather than other aspects. The results from the empirical analysis provide some evidences of positive relationships between financial performance and CSR disclosure for each group of data. Firstly, the results from all company groups show that there are strong positive relationships between CSR disclosure and ROA, NPM, and Tobin’s Q. Secondly, the results from the manufacturing group reveal a positive and significant relationship between CSR disclosure and ROA, NPM, while for non-manufacturing industry, CSR disclosure also has a positive relationship with TBQ. Lastly, for the financial group, the findings are similar with all companies group and the non-manufacturing group. As well, CSR disclosure is not related to earnings per share (EPS) in all models. This study adds further evidence to the literature on the relationship between CSR disclosure and financial performance in an emerging country. In particular, it is found that there is a strong positive relationship between CSR disclosure and financial performance measures in terms of ROA, NPM and TBQ for the three sample groups. In addition, this study provides an empirical examination of CSR disclosure by using a constructed CSR index based on CSR disclosures by listed Thai companies. This study concluded that on the basis of stakeholder and legitimacy theory, the extent of corporate social responsibility information disclosed in Thai companies’ annual reports are similar, and firm specific characteristics have an impact on CSR disclosure. These two theories can help to explain the significance of CSR disclosure on improving financial performance in Thailand

The relationship between corporate social responsibility disclosure and financial performance: evidence from Thailand

This study examines the relationship between corporate social responsibility (CSR) disclosure and financial performance in Thailand during the period 2009-2011. Four measures of financial performance were used based on data extracted from the annual reports of 232 firms listed on the Stock Exchange of Thailand. A CSR disclosure index was constructed to measure the extent and dimensions of CSR disclosure. Overall, the results from the empirical analysis provide some evidence of positive relationship between financial performance and CSR disclosure. This study adds further evidence to the literature on the relationship between the CSR and financial performance in an emerging country. In particular, it is found that there is a strong positive relationship between CSR and financial performance in Thai listed firms. As well, CSR disclosure is not related to market based performance when tested using pooled OLS but it is found to be significant when instrumental variables estimation is carried out

Factors affecting the liquidity of commercial banks in India: a longitudinal analysis

This paper examines the long-term effect of various regulatory, bank-specific and macroeconomic factors on the determination of liquidity in Indian banks. For this purpose, the study uses a random effect panel data regression model and tests it with data on Indian banks for 21 years, covering the period from 1996 to 2016. The model considers the effect of regulatory factors, cash reserve ratio, and statutory liquidity, and incorporates four different liquidity ratios specific to the Indian banking scenario. The results of the analysis show contrasting relationships between the independent variables and the dependent variables measured by four liquidity ratios. It is interesting to note that Indian banks rely more on asset-based liquidity and less on liability-based liquidity. More specifically, the most important liquidity ratio of L1 (liquid assets to total assets ratio) showed a significant relationship with macroeconomic variables of discount rates, call rates, foreign exchange reserve, exchange rate with US dollar, consumer price index and gross domestic product. L1 also showed a significant relationship with bank-specific variables of capital to total assets and bank size. However, the regulatory factors of cash reserve ratio and profitability determined by return on equity (ROE) and non-performing assets were not found to have any effect on liquidity of Indian banks

Political Uncertainty and Financial Firm Performance: Evidence from the Thai Economy as an Emerging Market in Asia

This study analyzes the effects that certain political-uncertainty factors have on financial firm performance in the Stock Exchange of Thailand (SET). The results of a panel regression performed on a database of 7976 firm-years over 18-year unbalanced panel data from 2001 to 2018 show a mixed relationship between political uncertainty and firm performance. The constitutional reform harms the return on assets (ROA), and the government election and political protest significantly decreased the market value of equity (MVE). In contrast, constitutional reform increased MVE, and the government election positively impacted ROA. Therefore, this study emphasizes how political unpredictability is assumed to influence firm performance in Thailand’s economy, an Asian developing country

Determinants of liquidity in nationalised banks of India

The purpose of this paper is to identify the determinants of liquidity among government owned nationalised banks in India. Nationalised banks in India are the biggest group of banks and any issue with nationalised banks can have the potential of affecting liquidity of entire banking system in India. The data covers a period from 1996 to 2012. Results of OLS regression show that the most significant factors influencing liquidity in nationalised banks of India are: call rate, cash reserve ratio and statutory liquidity ratio, gross domestic products, among the macroeconomic factors and capital to total assets and log of total assets for bank specific factors. Others factors have very little influence on liquidity of banks in India. Cash reserve ratio has a positive and expected relationship with liquidity ratios. As such statutory liquidity ratio are not very effective instruments of managing liquidity in nationalised banks of India. Supervision of each bank may become necessary for proper implementation of regulatory measures in India