Nirmala Devi Mohanadas, Abdullah Sallehhuddin Abdullah Salim and Lim Kwee Pheng
This study aims to examine how corporate social responsibility (CSR) performance and corporate tax aggressiveness relate in Malaysia, an emerging economy in Southeast Asia. It…
Abstract
Purpose
This study aims to examine how corporate social responsibility (CSR) performance and corporate tax aggressiveness relate in Malaysia, an emerging economy in Southeast Asia. It also seeks to analyse how CSR performance in community, environment, marketplace and workplace themes relate to the tax aggressiveness of listed companies in this country.
Design/methodology/approach
This study analyses 182 companies listed in the Main Market of Bursa Malaysia from 2010 to 2012 using fixed-effects panel regression and ordinary least square regression. It uses current effective tax rate as a proxy for corporate tax aggressiveness and measures CSR performance using specially developed CSR performance disclosure index.
Findings
This study finds no statistical support that CSR performance is related to corporate tax aggressiveness in Malaysia. Similarly, there are no statistically significant relationships between environment-related and marketplace-related CSR performance and corporate tax aggressiveness. Nevertheless, community-related CSR performance has significant negative relationship with corporate tax aggressiveness. Workplace-related CSR performance meanwhile has significant positive relationship with corporate tax aggressiveness.
Originality/value
This study expands the current literature's focus on developed economies by examining the relationship between CSR and corporate tax aggressiveness in the setting of an emerging Asian economy, i.e. Malaysia. It is also the first empirical study focussing on this relationship among Malaysian listed companies.
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Mohammad Talha and Abdullah Sallehhuddin Abdullah Salim
The purpose of this paper is to investigate what causes a firm to choose between a business segment and a geographic segment as a primary segment for its segmental information…
Abstract
Purpose
The purpose of this paper is to investigate what causes a firm to choose between a business segment and a geographic segment as a primary segment for its segmental information disclosure. It seeks to examine Malaysian firms' experiences as they disclose segmental information under the new accounting standard known as FRS 114, Segment Reporting.
Design/methodology/approach
The paper involves 374 Malaysian public‐listed companies which disclosed segmental information in their 2006 annual reports. Four hypotheses are developed to examine the influence of these five factors, namely the size of the company, listing status, financial leverage, financial performance, and industrial membership. The non‐parametric test is employed to test the formulated hypotheses.
Findings
The results reveal two important outcomes: first, size of company, financial performance, and industrial membership are significantly associated with the choice of a primary segment; and financial leverage of a company and listing status are not significantly associated with the choice of a primary segment.
Research limitations/implications
The limited number in the sample and inherent segmental reporting problems present limitations.
Practical implications
The paper implies extensive auditing work as the new standard requires more extensive disclosure for the primary segment, although the standard allows the adoption of primary segment reporting at management's discretion.
Originality/value
The paper's value lies in determining what motivates a company to disclose a business segment or a geographic segment as its primary segmental reporting basis.
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Keywords
Mohammad Talha, Abdullah Sallehhuddin and Junaini Mohammad
To empirically examine the changing pattern of competitive disadvantage experienced by the reporting companies in disclosing segmental information in the Malaysian environment.
Abstract
Purpose
To empirically examine the changing pattern of competitive disadvantage experienced by the reporting companies in disclosing segmental information in the Malaysian environment.
Design/methodology/approach
The study consists of a final sample of 116 Malaysian companies listed on the Malaysian Bourse for the years 2000‐2002. Four hypotheses were developed to investigate the relationship between segmental information disclosure and competitive disadvantage. Adopting weighted average correlation (WAC) techniques and total performance index (TPI), a multivariate least square regression model was employed to test the four formulated hypotheses.
Findings
The statistical analysis employed provides a mixed pattern yet comprehensive understanding of relationship between segmental information disclosure and competitiveness level among 116 reporting companies listed in Malaysian Bourse from the years of 2000‐2002.
Research limitations/implications
The proprietary theory assumes at least two forms that differ on the basis of who are included in the proprietary group. Secondly, the existence of discretionary judgments among managers in determining the segment definition, items to be disclosed and level of materiality involved. Lastly, the size of final sample leads to caution in generalizing the analysis.
Practical implications
The results provide insights to interested groups such as accounting standard bodies, affected companies and the accounting profession, specifically in the Malaysian environment with the introduction of the new standard on segmental information disclosure known as MASB 22 segment reporting.
Originality/value
The study is very timely especially with the introduction of new accounting standard governing segmental reporting by companies in Malaysian financial reporting environment. The great value of this study is highlighted by the effort to empirically investigate the competitive disadvantage experienced by the reporting companies as they disclose segmental information as required by the new standard.