The impact of introducing new regulations on the quality of CSR reporting: Evidence from the UK
Ruba Subhi Hamed,
Basiem Khalil Al-Shattarat,
Wasim Khalil Al-Shattarat and
Journal of International Accounting, Auditing and Taxation, 2022, vol. 46, issue C
This study examines the adoption of mandatory corporate social responsibility (CSR) regulation in the United Kingdom (UK). Specifically, we investigate whether adopting new CSR regulations impacts the quality of firms’ CSR reporting and explore whether that quality depends on a firms’ characteristics. Our empirical results suggest that the UK’s mandatory CSR reporting regulation significantly enhances CSR reporting quality. We further find that firms’ characteristics, particularly corporate governance and firm size, improve mandatory CSR reporting quality. Our results are robust to the use of an alternative proxy of CSR quality assessment and testing for endogeneity. These findings suggest that committing to CSR can substantially benefit stakeholders, who will be better informed regarding the firms’ CSR performance through improved reporting quality. This factor can influence investors’ beliefs and market valuations, which may subsequently guide firms’ investment decisions.
Keywords: Mandatory CSR; Firm characteristics; Corporate governance; High and low CSR quality (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jiaata:v:46:y:2022:i:c:s1061951821000690
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