The impact of government and foreign affiliate influence on corporate social reporting

Abstract

PurposeThis paper seeks to investigate the influence of government and foreign affiliates, particularly; multinational companies on corporate social reporting (CSR) development in an economy, where CSR awareness is low coupled with weak pressure group activism.Design/methodology/approachThis is a cross sectional study that focuses on the information contained in the annual reports for year 2002/2003. This research uses content analysis as method to measure the extent CSR.FindingsBased on regression analysis, the study evidences on the impact of government influence. However, the impact of foreign affiliation variables is not evident. Institutionalisation of the government's aspirations and commitment to CSR is perhaps the most appropriate description for Malaysian CSR practice.Research limitations/implicationsThere are two main limitations of this study. Firstly, this study examines the annual reports for one year. Secondly, this study is annual reports centric. It does not examine any other stand alone reports that the respondents might have produced on the subject of society and the environment.Practical implicationsThis study provides justification for government's role in promoting CSR practice. The impact is evidenced although there are no direct concerted efforts at that time by the government in respect of CSR policy implementation. The significant role is attributed to the unique Malaysian socio economic structure.Originality/valueThis study contributes to the CSR literature particularly in the context of economies where governments play a significant role in promoting economic development. It provides empirical evidence of the influence of government and foreign affiliates. It also adds to the literature by explaining the phenomenon from the Institutional perspective and its relevance to a developing economy.