Assessing the determining factors of corporate social and environmental responsibility reporting in Bangladesh: moderating effect of industry sector and country of origin

Organizational legitimacy become subject to much deliberation due to several cases of corporate misconduct, significant discrepancies between Corporate Social and Environmental Responsibility (CSER) rhetoric and practices and manipulation of business practices to meet social expectations existing in society which raised up the issue of illegitimacy or legitimacy gap. A widening gap will cause an organization to lose its legitimacy and thus create several social and environmental issues. Under such circumstance an organization can adopt a number of public disclosure strategies for its survival. Therefore, the objectives of this study are to investigate the factors affecting CSER reporting as well as to identify whether industry sector and country of origin are able to moderate those relationships. In order to achieve the study objectives, the data have been collected from secondary data source: annual report, sustainability report and company's website. The sample of this study consists of 207 observations from 69 companies for three years from 2012 to 2014. Panel data analysis has been used and fixed effects and random effects have been performed using STATA version 13 to observe the association between the variables. The multiple regression findings have shown that size of organization, CSER committee, managerial ownership, government ownership, foreign ownership and audit firm have positive and significant relationship with CSER reporting while CEO duality has a significant negative relationship. On the other hand, the study has found no convincing evidence to support the effect of profitability and leverage on CSER reporting. In addition, by using hierarchical regression, this study also estimates the moderation effect of industry sector and country of origin. The study has revealed that industry sector is able to moderate the relationship between leverage, CSER committee, managerial ownership, government ownership, CEO duality and CSER reporting while country of origin has moderation effect on the relationship between profitability, CSER committee, CEO duality and CSER reporting. Thus, this study identifies three conceptually distinct, but interrelated conceptsinstitutional level, organizational level, and individual level factors. This is done in a context where prior studies do not relate these concepts to each other nor incorporate them into a single framework. This synthesis of the factors that contribute to social environmental performance and reporting is the study's substantial empirical and theoretical contribution. Apart from contributing to the body of knowledge, this study also has potential to create positive social change for a number of stakeholders as regional contributions. The present study, therefore, has implications for policy and practice, as such policies has impact on companies and how companies respond to social and environmental expectations of society in achieving legitimacy.