Institutional factors and CSR reporting in a developing country: Evidence from the neo-institutional perspective

Abstract

AbstractThis research aims to investigate how institutional pressures, such as legal, cultural, and normative factors, affect CSR reporting (CSRR) in the context of a developing nation. Based on the purposive sample method, 272 DSE-listed companies from 2017–18 to 2020–21 were identified, and 1088 observations were investigated in this research. The study also employed a content analysis approach to preparing the CSRR index, considering 40 items. The proposed hypotheses were then investigated using the OLS regression model. Applying the neo-institutional theory and the regression analysis results revealed that CSR reporting is positively and significantly associated with the country’s institutional environment. Specifically, the presence of CSR reporting guidelines, the reforming of the corporate governance code, firms auditing with big audit firms, the company’s multinational operations, and firm GRI registration positively impact CSR reporting. As opposed to that, firms’ membership in CSR-related associations was found to have a negative and insignificant impact on CSR reporting. This study pays rigorous attention to policy-level and managerial implications. Mainly, the study provides the regulatory bodies with a valuable insight into applying institutional factors to enhance firm CSR reporting. The study’s findings added to the body of knowledge on CSR reporting by presenting new data on the influence of institutional elements on CSR reporting in the setting of a developing nation like Bangladesh.

Keywords

• Neo-institutional theory
• institutional factors
• CSR reporting
• developing country
• Bangladesh