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The effect of corporate governance practices on corporate social responsibility disclosure: Evidence from Palestine

Mohammad A.A. Zaid (School of Accounting, Dongbei University of Finance and Economics, Dalian, Liaoning, China and China Internal Control Research Center, Dalian, Liaoning, China)
Man Wang (School of Accounting, Dongbei University of Finance and Economics, Dalian, Liaoning, China and China Internal Control Research Center, Dalian, Liaoning, China)
Sara T.F. Abuhijleh (School of Accounting, Dongbei University of Finance and Economics, Dalian, Liaoning, China and China Internal Control Research Center, Dalian, Liaoning, China)

Journal of Global Responsibility

ISSN: 2041-2568

Article publication date: 25 March 2019

Issue publication date: 22 May 2019

1584

Abstract

Purpose

The purpose of this study is to empirically examine the deeply rooted relationships between corporate governance (CG) and corporate social responsibility (CSR) disclosure as two complementary mechanisms used by companies to reinforce the link with stakeholders and whether the extent of CSR disclosures made by Palestinian non-financial-listed companies during the period from 2013 to 2016 is associated with CG practices.

Design/methodology/approach

Content analysis technique was used to extract and measure CSR information from annual reports of 33 companies listed on the Palestine Stock Exchange (PEX). Therefore, CSR disclosure index was constructed using 32 items divided into four categories as a measure of the extent of CSR disclosure in the firm’s annual reports. OLS regression was performed to test the association between CG and the extent of CSR disclosure in this longitudinal study.

Findings

Panel data reveal that the level of CSR reporting has slightly increased over the study period. Further, the results also show that the level of CSR disclosure is positively and significantly affected by board size and independence, while gender diversity has a positive but statistically insignificant influence. Additionally, CEO duality is negatively and significantly correlated with CSR disclosures.

Research limitations/implications

The study designs are limited to the Palestinian non-financial-listed firms. Furthermore, the generalisation of the findings might be restricted solely to the listed companies working in similar socioeconomic status.

Practical implications

The findings of this study can draw policy-makers’ attention in developing countries, particularly in the Arab world, to meet the increasing need for updating the regulatory and institutional framework in the vein of CG reform and the related regulatory policies to promote the efficiency of CSR practices.

Social implications

More efforts should be made to strengthen the awareness of the Palestinian listed companies of the advantages of CSR reporting on social reality. Thus, from a management perspective, companies have to take equally into account the financial and social outcomes of CSR activities.

Originality/value

Empirical evidence on the nexus between CG and CSR disclosure from countries affected by socio-political instability is extremely limited. This study bridges this research gap and contributes theoretically and practically to the CSR literature by providing empirical evidence from a developing country with a unique business environment.

Keywords

Citation

Zaid, M.A.A., Wang, M. and Abuhijleh, S.T.F. (2019), "The effect of corporate governance practices on corporate social responsibility disclosure: Evidence from Palestine", Journal of Global Responsibility, Vol. 10 No. 2, pp. 134-160. https://doi.org/10.1108/JGR-10-2018-0053

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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