Religious social norms and CSR deficiency disclosure^*

^*Accepted by Jeong-Bon Kim upon recommendation by Changling Chen.

Abstract

This study investigates the relation between religious social norms and corporate social responsibility (CSR) deficiency disclosure. Building on the social-political theory of voluntary disclosure, we hypothesize that religious social norms generate legitimacy motivations that bind corporate insiders to disclose CSR deficiencies and that such effects are more pronounced where formal institutions are weaker. We test these hypotheses in a group of Chinese listed firms that voluntarily file standalone CSR reports. Our empirical results are consistent with these hypotheses and robust to the robustness checks. Our study contributes to various related literature and has important implications for policymakers and investors.

Keywords:

• Disclosure
• deficiency information
• religious social norms
• corporate social responsibility
• emerging market

Notes

^* Accepted by Jeong-Bon Kim upon recommendation by Changling Chen.

1. See, for example, http://www.chinadaily.com.cn/china/2007-02/07/content_802994.htm.

2. See http://www.zuobiao.me.

3. See http://www.economist.com/news/briefing/21629218-rapid-spread-christianity-forcing-official-rethink-religion-cracks.

4. See www.hexun.com.

5. We attempt to construct two additional variables, West and Muslim, and include them in Equation (2). While the coefficient of Religiosity remains significantly positive, we fail to document significant coefficients for West and Muslim, indicating that neither western religions such as Christianity nor Muslim social norms impact corporate insiders’ decision to disclose CSR deficiency information in the Chinese context.