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Article
Publication date: 14 December 2020

Farah Zamir, Greg Shailer and Abubakr Saeed

Corporate investment efficiency ultimately influences economic development but is largely at the discretion of managers. Information asymmetries are problematic in emerging…

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Abstract

Purpose

Corporate investment efficiency ultimately influences economic development but is largely at the discretion of managers. Information asymmetries are problematic in emerging markets, but it is widely believed that corporate social responsibility (CSR) disclosures can reduce information asymmetries. This paper examines whether CSR disclosures influence corporate capital investment efficiency in emerging Asian markets.

Design/methodology/approach

Investment inefficiency is measured as the residuals from an investment model that is constructed by combining variables from prior studies to obtain a more detailed specification. A CSR disclosure index (CSRDI) is constructed from manually collected CSR disclosures for the largest corporations in each of the nine Asian emerging markets, as categorised by the MSCI Emerging Market Index, during 2015–2017. Underinvestments and overinvestments are regressed against the CSRDI, using a two-stage model to address the potential self-selection of CSR report issuers.

Findings

The results indicate that CSR disclosures reduce underinvestment for large firms but do not constrain overinvestment. These results are consistent with the propositions that, by increasing transparency or reducing information asymmetry, CSR disclosures can improve firm access to external finance needed to invest in profitable projects but cannot constrain entrenched managers who are not reliant on external finance.

Originality/value

This study extends the literature by analysing the impact of CSR disclosures on both underinvestments and overinvestments and by examining the CSR-investment efficiency across the nine emerging Asian markets. This enhances generalisability compared to single market studies. More generally, this study enhances the understanding of the role of non-financial disclosures in the Asian emerging markets, where corporate investment efficiency is important for economic development but where severe information asymmetry and agency conflicts between insiders and external investors are prevalent. Both the investment community and policymakers should benefit from enhanced understanding of factors that influence investment efficiency in those markets.

Details

International Journal of Managerial Finance, vol. 18 no. 1
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 22 November 2011

Jacqueline Birt and Greg Shailer

Changes in Australian segment reporting standards over the last decade changed the required disaggregation of segment information. The purpose of this paper is to investigate…

2834

Abstract

Purpose

Changes in Australian segment reporting standards over the last decade changed the required disaggregation of segment information. The purpose of this paper is to investigate whether increased disaggregation has implications for users' confidence in decisions based on segment reports and perceptions of segment reporting usefulness.

Design/methodology/approach

Using an experiment based on the differences between the original AASB 1005 and the more detailed requirements of AASB 114, the authors test whether segment report users' confidence in forecasting and their perceptions of segment report usefulness differ between the different information sets provided under these standards.

Findings

It was found that the more disaggregated or finer reports based on AASB 114 provide significantly more confidence to users, compared to the coarser segment reports based on the original AASB 1005, but this is not associated with differences in segment report usefulness scores.

Research limitations/implications

The authors' experiment is based on AASB 1005 and AASB 114 and the results cannot be generalized to differences with other reporting standards. Examination of differences in recently released AASB 8 may reveal different implications for users' confidence and perceptions of usefulness. More generally, other tests of usefulness are needed to confirm whether opinions of usefulness that are not confirmed by decision‐making practices provide a reliable basis for determining usefulness.

Practical implications

By confirming that decision makers' confidence can be increased by the provision of finer information sets, the authors' results have practical implications for accounting standard setting.

Originality/value

By testing the impact of report differences on user decision confidence, the paper addresses a previously overlooked issue.

Details

Accounting Research Journal, vol. 24 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

Available. Content available
Article
Publication date: 24 April 2007

603

Abstract

Details

Accounting, Auditing & Accountability Journal, vol. 20 no. 2
Type: Research Article
ISSN: 0951-3574

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Book part
Publication date: 14 November 2012

Abstract

Details

Corporate Social Irresponsibility: A Challenging Concept
Type: Book
ISBN: 978-1-78052-999-8

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Book part
Publication date: 13 December 2010

Abstract

Details

Reframing Corporate Social Responsibility: Lessons from the Global Financial Crisis
Type: Book
ISBN: 978-0-85724-455-0

Available. Content available
Book part
Publication date: 28 July 2014

Abstract

Details

Communicating Corporate Social Responsibility: Perspectives and Practice
Type: Book
ISBN: 978-1-78350-796-2

Available. Content available
Book part
Publication date: 16 December 2016

Abstract

Details

Finance and Economy for Society: Integrating Sustainability
Type: Book
ISBN: 978-1-78635-509-6

Available. Content available
Book part
Publication date: 19 July 2018

Abstract

Details

The Critical State of Corporate Social Responsibility in Europe
Type: Book
ISBN: 978-1-78756-149-6

Available. Content available
Book part
Publication date: 7 October 2011

Abstract

Details

Finance and Sustainability: Towards a New Paradigm? A Post-Crisis Agenda
Type: Book
ISBN: 978-1-78052-092-6

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Book part
Publication date: 17 September 2014

Abstract

Details

Corporate Social Responsibility and Sustainability: Emerging Trends in Developing Economies
Type: Book
ISBN: 978-1-78441-152-7

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