The influence of stakeholder power on corporate social responsibility: evidence from a relationship-based economy

Abstract

Purpose

This study aims to examine whether lenders’ power and other attributes influence corporate social responsibility (CSR) reporting in Bangladesh.

Design/methodology/approach

This study uses content analysis to examine specific CSR-related attributes from 115 publicly listed firms in Bangladesh. By using various attributes of social and environmental reporting a disclosure index is also constructed. This study uses an Ordinary Lease Square Regression analysis to examine the relationship between stakeholders’ power and CSR reporting.

Findings

The finding is that lenders’ power, or the extent of borrowing, does not influence CSR exposure. However, lenders’ cost of monitoring and ability to monitor significantly and positively influence CSR exposure.

Research limitations/implications

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

Practical implications

The implication of this study is that, when multiple borrowing creates “claim-dilution” problems, lenders are found to influence CSR activity.

Originality/value

This study also supports the stakeholder theory and contributes to the literature on the practices of CSR reporting in the context of developing countries.

Citation

Rashid, A. (2015), "The influence of stakeholder power on corporate social responsibility: evidence from a relationship-based economy", Social Responsibility Journal, Vol. 11 No. 2, pp. 270-289. https://doi.org/10.1108/SRJ-09-2013-0109