Institutional shareholding and corporate social responsibility reporting: evidence from Bangladesh

Abstract

Purpose

This study aims to examine the influence of institutional shareholding on a firm’s corporate social responsibility (CSR) practices in Bangladesh.

Design/methodology/approach

This study uses a content analysis to capture a firm’s CSR practices, based on various attributes of social and environmental reporting made by the firm. Based on these attributes, a corporate social responsibility reporting index (CSRI) is constructed. To examine the causal relationship between institutional shareholding and firm CSR practices, this study uses a simultaneous equations approach to control the endogeneity problem.

Findings

The finding of this study is that both CSR reporting and institutional shareholding negatively influence each other.

Research limitations/implications

This study is subject to some limitations such as the subjectivity or judgement associated in the coding process.

Practical implications

If the institutional investors are not concerned with its environmental and societal issues, there will be a sustainability issue for the business because companies will continue ignoring the employee health and hygiene, education, training and welfare. Their ignorance of these societal issues will lead to compromising the quality of living for important stakeholders within the society.

Originality/value

This study contributes the literature on CSR reporting.

Citation

Rashid, A. (2020), "Institutional shareholding and corporate social responsibility reporting: evidence from Bangladesh", Journal of Asia Business Studies, Vol. 15 No. 1, pp. 153-173. https://doi.org/10.1108/JABS-09-2019-0285