Effect of Corporate Social Responsibility Disclosure on Financial Performance

Abstract

Corporate social responsibility is the commitment by business to contribute to sustainable development through the balance of three factors which are economic, social and environmental factor. Enterprises carry out corporate social responsibility through specific activities such as controlling environmental pollution, natural resource conservation, energy conservation, employment safety, especially supporting and developing community. Corporate social responsibility disclosure plays an important role in implementation of corporate social responsibility, promotion of business’s image and creation of good impression to stakeholders. This study was conducted using a two-step Generalized Method of Moment (GMM) technique with instrumental variables for balanced panel data through the annual reports and sustainable development reports of 43 enterprises listed on the Vietnam stock market from 2006 to 2016 (473 observations). The results showed that the level of corporate social responsibility disclosure has a positive effect on return on assets. This study has important implications for enterprises in terms of investing activities and corporate social responsibility disclosure.