The legitimacy of institutional theory: The case of

CSR reporting in cross-cultural settings

Shayuti Mohamed Adnan 1, Chris J. van Staden 2 and David Hay3

ABSTRACT
This paper puts forward an argument that cultural factors interact with the institutional structures of
organizations; and thus influence their CSR reporting system. Observations on 403 annual reports,
corporate websites and CSR stand-alone reports of 203 companies in China, Malaysia, India and the
UK support the argument. The results show that in China, both the quality and quantity of CSR
disclosure increase significantly with the existence of CSR board committees, where the culture is one
of collectivism, rather than of individualism. The paper also demonstrated that government-owned
companies in Malaysia provide CSR disclosure of a quality higher than non-government owned
companies. A similar relationship does not apply to companies in other countries. The results testify
to institutional theorythat CSR reporting is influenced by the organizational settings of a country
and the culture of a country. For policy makers, it is suggested that CSR reporting policy should be
drafted in a way that suits the local culture.

, Department of Accounting & Finance, University of Malaysia Terengganu, Malaysia. Corresponding author
email: shayuti.adnan@umt.edu.my
2
Professor of Accounting, Department of Accounting, AUT University, Auckland, New Zealand.
3
Professor of Auditing, Department of Accounting & Finance, The University of Auckland Business School,
New Zealand.

Electronic copy available at: http://ssrn.com/abstract=2498257

The legitimacy of institutional theory: The case of

CSR reporting in cross-cultural settings
1. INTRODUCTION
Findings in the literature are not consistent in describing the motivations for CSR disclosure of
companies across countries (Williams, 1999; Adams and Kuasirikun, 2000; Haniffa and Cooke, 2005;
Holland and Foo, 2003; Amran and Devi, 2008). For example, previous literature documented that
corporate governance influences corporate disclosure practice either positively or negatively,
depending on the country of origin (Kamla, 2007; Xiao et al., 2005; Haniffa and Cooke, 2005; Wang
et al., 2008; Eng and Mak, 2003). It is also reported that institutional ownership could either
encourage or hinder disclosure. We extend the discussion on governance and ownership structures by
observing cultural issues in the CSR reporting model companies in diverse cultural settings.
We argue that there are cultural influences in the CSR reporting model. Cross-country research has
documented that CSR reporting practices between countries are different (e.g. see Holland and Foo,
2003; Adams and Kuasirikun, 2000; Buhr and Freedman 2001; Silberhorn and Warren, 2007). Some
inferences are also made, showing that culture is important in explaining the variation of CSR
reporting practices across countries (e.g. Williams, 1999; Van Der Laan Smith et al. 2005). In
addition, there is a claim stating that the current model of CSR has been developed mainly in the West
and thus may not be tailored to the needs of societies in the East (Kamla, 2007). If such a claim is
true, we would expect to see some variation in CSR reporting practices between countries in Asia and
Western countries. More importantly, previous research has shown that a governance mechanism
which is effective in one country might not be suitable for another country (e.g. Doidge, 2007). Thus,
we aim to minimize the gap in the literature by suggesting that a simultaneous relationship between
culture, corporate governance, and ownership structure exists in the CSR reporting model. The major
challenge appears to be the need to develop a comprehensive framework for the assessment of the
drivers of CSR reporting across countries.
This paper has two research objectives. The first is to investigate the effects of national culture on
CSR reporting. The second objective is to examine whether there is an interaction of cultural variables
with factors that influence CSR reporting. Specifically, a total of 203 large corporations operating in
eight industries (i.e. energy; oil and gas; materials; manufacturing; transportation; automobiles and
components; alcohol, tobacco, casino and gambling; pharmaceutical, biotechnology and drugs, and
utilities) were selected from the Compustat Global and Mergent Online database. Sentences in their
reports concerned with CSR were identified based on a checklist of 65 items, which had been
modified from Global Reporting Initiative (GRI) indicators. CSR disclosure quantity is computed by
sentence counting and the quality is determined based on a scale of 0 to 4.
Overall, the results show that CSR reporting practice is different across countries; UK corporations
provide the most CSR information, followed by India, Malaysia and China. A considerable amount of
support was found indicating that CSR reporting is enhanced by the presence of CSR board
committees. In relation to cultural issues, results indicate the interaction of individualism with CSR
board committees in the CSR reporting model. When interaction is not taken account of., CSR
reporting is prominent in countries in which the society is individualistic. However, the presence of
CSR board committees enhances the CSR reporting of companies in which the society is collectivist.
Accordingly, the existence of CSR board committees is more effective in China than in other
countries. Finally, the results show that in Malaysia and China, the quality of CSR information in the
government-linked companies is higher than in their non-government counterparts. A discussion on
institutional background and general context of the countries in this study is provided in the
explanation of the findings.
2

Electronic copy available at: http://ssrn.com/abstract=2498257

The study contributes to the literature by showing how cultural factors interact with the institutional
structures of organizations; and thus influence their CSR reporting system. In China, where trhe
culture is collectivistic, both the quality and quantity of CSR disclosure increase significantly with the
existence of CSR board committees. The results are consistent with institutional theory. CSR
reporting is influenced by organizational settings and cultural factors within a country.
The remainder of this paper is organized as follows. Section 2 provides theoretical frameworks,
reviews literature and presents the hypotheses. Section 3 describes research design and Section 4
presents results. In the final section the findings are discussed and conclusions are drawn.
2. THEORETICAL FRAMEWORK AND HYPOTHESES DEVELOPMENT
Corporate Social Responsibility (CSR)
Since the 1970s, issues surrounding CSR have been discussed in several accounting papers (see
Mathews, 1997; Gray, 2002; Deegan and Soltys 2007; Parker, 2011. The term interchangeably
refers to sustainability accounting (Gray, Bebbington and Walter, 1993); social accounting (Cooper et
al., 2005); social and environmental accounting (Guthrie et al. 2008); and social, environmental and
ethical accounting (Adam and Larrinaga Gonzalez, 2007).
Owen (2008) describes the concept of CSR as a moving social construction, that responds to many
issues such as ecological and societal change, mood, social inquiry and researchers scope of inquiry
(Parker, 2011). Generally, the concept aims to address the limitations of the traditional accounting
framework, and it considers the same range of issues, namely the social and environmental impacts of
corporate activity (Bebbington, 2001; Guthrie and Boedker, 2006).
This research only focuses on CSR reporting because generally, a company cannot measure (and
report) something that it does not manage. Thus, CSR reporting is viewed from two perspectives
(Gray et al., 1995). Firstly, CSR as an addendum to conventional accounting activity which assumes
the financial community to be the main users. In this regard, the current accounting system is
accepted as the status quo (perhaps with some improvements in relation to voluntary disclosure
aspects). Secondly, CSR is placed within the role of information in organization-society dialogue.
This viewpoint expects corporations to play a greater role than just the maximization of profit
(Adams, 2002; Gray, 2002) Thus, CSR is viewed in the context of an organizational interaction
between a society and all its constituent parts including its natural environment, employees,
communities, and customers.
Institutional theory
Institutional theorists assert that institutions are less likely to change than other structures (Zucker,
1977), bringing about stability and inertia or homogenization of organizations (i.e. isomorphism)
(DiMaggio and Powell, 1983). The structures are termed as cognitive, normative, and regulative. The
cognitive structure describes what seems to be institutionalized in an organization as being culturally
supported and conceptually correct (DiMaggio and Powell, 1983). As a result, organizations tend to
copy or model procedures used in other organizations, if such practice is perceived as conceptually
right (Rahaman et al,. 2004). In the case of CSR reporting, similar firms competing in the same
industry are more likely to benchmark and imitate those firms considered to be superior. This process
is referred to as mimetic isomorphism.
Normative isomorphism deals with pressure to conform to a set of norms and rules developed by a
professional and occupational group. This structure maintains the appropriateness of shared values
within the organization. For instance, the existence of global standards such as GRI could govern the
CSR reporting of multinational corporations, which is generally voluntary.
Finally, regulative structure (also termed as coercive isomorphism) refers to the role of regulation in
bringing about institutionalization. It refers to the source of pressure to conform to institutionalised
procedures (Rahaman et al., 2004). For example in Malaysia, it is argued that the coercive structure,
3

i.e. the government involvement in CSR activities and its investment have influenced CSR reporting
of government-linked-companies in Malaysia (Amran and Devi, 2008).
Ball and Craig (2010) assessed the capacity of institutional theory in providing an understanding of
organizational change in response to social and environmental issues. Specifically, they questioned
firstly if sufficient attention has been paid to the discussion of CSR reporting in a broader institutional
environment; and secondly whether proponents of normative models of social and environmental
accounting have paid sufficient attention to the choices about accounting which are embedded in
cultural and historical frameworks. (page 284). They comment that institutional theory has not been
regarded as a theory or organisational change, but usually as an explanation of the similarity
(isomorphism) and stability of organizational arrangements in a given population (page 284). Thus,
they proposed an extension of the institutional theory by incorporating Lounsbury (1997)s
framework in the model. They argue that (the) variation in political outlook can help us to understand
how the timing, organization, and acceptance of environment accounting initiatives are likely to differ
according to national context (Lounsbury, 1997).
Similarly, Harrison and McKinnon (1986) provided a framework, which suggests that accounting
changes are driven by three main factors: responsive events, intrusive events and cultural
environment.They argue that these events influence accounting systems, and that there is a cultural
influence within and between the various systems in an organization. This point shows that culture is
an important aspect that should not be omitted when CSR reporting is being described.
Accordingly, we argue that cultural aspects and institutional factors should simultaneously influence
CSR reporting practice across countries. For example, globalization and the development of voluntary
standards in relation to CSR reporting such as GRI are considered as the external events that shape
the strategy of CSR reporting in an organization. However, choices on accounting policy still exist at
the organizational level. For example, the options to disclose CSR information in an corporate annual
report, or to have CSR board committees in place, or to seek professional assurance for CSR
information are all instances of managerial choice. In other words, it is an institutional lens that
shapes these choices. Nonetheless, cultural attributes, including norms and values, also determine the
option that an organization takes.
A model that attempts to explain this scenario is presented in Figure 1. The model describes that the
institutional environment exists in two layers: international and organizational. At each level,
isomorphism (i.e. coercive, normative and mimetic isomorphism) describes the CSR reporting
practice. However, cultural attributes provide links within and between isomorphism.
<< Insert Figure 1>>
Culture and CSR reporting
Withrop (1991) defines culture as the arrangement of beliefs and customs through which social
relations are expressed. It can also be interpreted as a set of standards for behaviour considered
authoritative within a society (Withrop, 1991). Hofstede (1980, p. 5) refers to culture as the collective
programming of the minds which distinguishes the members of one group from another. Such mental
programming could exist in several layers at various levels including national, regional, ethnic,
religious affiliation, gender and social class levels in addition to organizational and corporate levels.
Given this definition, based on a survey of 117,000 IBM employees, Hofstede (1980) expresses
culture in five dimensions, namely: power distance, individualism, uncertainty avoidance and
masculinity. These five cultural taxonomies explain the difference in the behaviour of individuals
from country to country. Power distance refers to the extent to which the unequal distribution of
power is tolerated within a society. Individualism is the extent to which the individual acts
independently as opposed to collectivism, where people prefer to be in a group. Uncertainty
avoidance refers to the situation where people feel threatened by unknown situations. Masculinity
represents stress on achievement, heroism, assertiveness and material success; whereas, feminine

society emphasizes relationships, modesty, caring for the weak and the quality of life4 (Hofstede,
1980; Hofstede, 2001).
In the context of Hofstedes national culture, Williams (1999) found that uncertainty avoidance and
masculinity are statistically related to voluntary environmental and social disclosure (VESAD). The
study hypothesizes that the levels of uncertainty avoidance negatively influence the extent of VESAD.
To illustrate, companies that operate in a society which has high levels of uncertainty avoidance have
a preference for secrecy because of the necessity to restrict information in order to avoid possible
conflict and uncertainty of competition and to ensure the preservation of security in the society
(Williams, 1999). Whereas, firms in more masculine-biased societies disclose less social and
environmental information because they encounter lower social expectations and demands for
information related to environmental and social matters.
Willamss (1999) model has provided evidence to explain the variation in CSR disclosure by
companies in Asia-Pacific. However, the model was tested based only on quantity of disclosure.
Aspects of quality of information are thus identified as a research gap that is examined in this study.
Van Der Laan Smith et al. (2005) performed an analysis on CSR disclosure which is more extensive
than Williams (1999) study because they analyse both the extent and quality of disclosures. They
conducted content analysis on 32 Norwegian/Danish companies and 26 US companies in the electric
power generation industry. Based on Hofstedes (2001) masculinity-femininity concept, they contend
that a masculine society is more concerned about power and economic status, whilst a feminine
society puts more emphasis on social goals such as relationships, helping others and the physical
environment. As a result, CSR reporting is expected to be better (in terms of quality and extent) in a
feminine society, as opposed to in a masculine society. Given this, Van Der Laan Smith et al. (2005)
hypothesize that the amount of CSR reporting in Norwegian/Danish companies should be greater than
in US companies. The findings provide significant support for the variations in quality and extent of
CSR reporting in these countries; culture is inferred as important in explaining the variation.
On the basis of Hofstedes framework, Gray (1988) developed four additional cultural accounting
values that specifically relate to corporate reporting practices. These include; professionalism versus
statutory control, uniformity versus flexibility, conservatism versus optimism and secrecy versus
transparency. Gray (1988) suggests that disclosure relates to secrecy. Secrecy increases with
uncertainty avoidance and power distance, and decreases with individualism and masculinity. If this
assumption is correct, it would suggest that culture plays a role in explaining the difference in the
corporate disclosure of countries throughout the world. Gray (1988) also suggests that Asian
managers are more secretive, collective, and have a high tendency to avoid uncertainty. Accordingly,
financial reports prepared by Asian corporations are expected to contain less voluntary information
than that of other societies.
For example, in the context of China, Chinese society is characterized as having high levels of
collectivism and power distance and strong uncertainty avoidance. Chinese society tends to adhere to
rules and regulations and companies tend to disclose little voluntary information in their annual
reports. Therefore, it is argued that Chinese culture does not promote voluntary disclosure (Huafang
and Jianguo, 2007). Chau and Gray (2001) confirm the secretive nature of Chinese reporting practices
in their comparative studies of companies in Hong Kong and Singapore and those in the US and the
UK.
However, in a more recent study, Qu and Leung (2006) found that regardless of the notable secrecy
level in Chinese society, Chinese listed companies are now more willing than in previous decades to
provide voluntary information in their corporate annual reports. In the study, Qu and Leung (2006)
investigated whether voluntary disclosure with regard to corporate governance can be found in
Chinese listed companies annual reports as a result of the changed cultural environment. Content
4

Later work by Hofstede (2001) added another variable, long versus short term orientation but this has not been
studied as widely.

analyses of 120 companies showed that 85 per cent of the sample made disclosures. In essence, the
results demonstrated that disclosure in Chinese society has improved despite the argument that the
society is generally secretive (Qu and Leung, 2006). Several recent studies also reported similar
results, finding that Chinese corporate reports are not generally secretive; factors such as listing status,
globalizations and ownership motivate the voluntary disclosure in China (Wang et al., 2008; Cheung
et al., 2010).
Accordingly, the relationship between national culture and CSR reporting might not be
straightforward. For example, it can be argued here that an individualistic society pays less attention
to CSR reporting as it values the maximization of shareholders wealth more than societal or
environmental needs. This viewpoint would expect a negative relationship between individualism and
CSR reporting. However, the relationship could be positive if the shareholders, in making their
investment decisions, also require social and environmental information in addition to the monetary
data.
Thus, we first assess whether CSR reporting practices vary across countries and if culture influences
CSR reporting. Later, we will establish the relevant arguments on the interaction of culture with
factors that influence CSR reporting. The following hypotheses are stated:
H1: The quality and quantity of CSR information are different across China, India, Malaysia and the
UK
H1a: National culture influences the quantity and quality of CSR information across China, India,
Malaysia and the UK
CSR reporting and Corporate Governance
The existence of a CSR board committee is considered important in explaining CSR reporting
practices across countries. For example, drawing upon legitimacy theory, Wahyuni et al. (2009) argue
that companies with an environmental committee are more likely to voluntarily disclose information
on greenhouse gas emissions than companies without such a committee. The presence of a committee
shows a companys concern in regard to legitimizing their environmental reputation (Neu et al. 1998).
Likewise, engaging the board of directors as members of an environmental (or social) committee
demonstrates the companys endeavours to improve its environmental (or social) performance. As a
result, we would expect the existence of CSR board committees to enhance CSR reporting. As the
existence of a CSR board committee is part of the issue of corporate governance, the relevant
literature on this issue is examined.
Researchers in the voluntary disclosure stream reported that corporate governance influences
accounting disclosure (e.g. Chen and Jaggi, 2000; Eng and Mak, 2003). However, the literature
provides inconsistent evidence on the way in which corporate governance influences corporate
reporting. For example, Haniffa and Cooke (2002; 2005) found that companies produce less voluntary
information when the number of non-executive directors on the board is high. This finding is opposite
to their prediction and the predictions of agency theory. Supposedly, a high number of outside
directors represents good monitoring of activities by the board and limits managerial opportunism
(Fama and Jensen 1983). Therefore, board composition (measured by the proportion of outside
directors) should be positively associated with voluntary disclosure.
Ho and Wong (2001) assert that inconsistent findings are attributed to the roles of governance
mechanisms in corporate disclosure policy, which can be either, complementary, or substitutive
(Kelton and Yang, 2008). Governance is complementary when it can restrain managers from
withholding information for their own benefit. As a result, good governance strengthens the quality
and comprehensiveness of corporate reporting. On the other hand, governance mechanism is
substitutive when it reduces information asymmetry and opportunistic behaviours in the firm. Thus,
corporate governance and voluntary disclosure are negatively associated in a substitutive-governance
environment (Kelton and Yang, 2008).
6

Additionally, it can also be argued that country differences could influence the governance
mechanism and thus the disclosure. For instance, Eng and Mak (2003) reported that the relationship
between the number of outside directors and voluntary disclosure is moderated by country variables.
They found that in Hong Kong, disclosure increases when a company has a large number of outside
directors. In contrast, in Singapore, the amount of disclosure decreases with an increase in the number
of outside directors.
Hence, we argue that national culture plays a role in explaining the association between corporate
governance and disclosure. For example, using Hofstedes masculine-feminine concepts, Van Der
Laan Smith et al. (2005) view corporate governance structures from two perspectives:
contractarianism and communitarianism (Bradley et al., 1999). They argue that governance structures
in US companies are contractarian (shareholder) oriented, whereas Norwegian/Danish companies are
communitarian (stakeholder) oriented (see also Simnett et al., 2009). Corporate governance structures
in contractarian countries (i.e. the USA) revolve around shareholder relationships and promoting
shareholder value whereas the structures in communitarian countries (i.e. Norway and Denmark) deal
with social responsibilities, which go beyond the achievement of economic efficiency. Cultural
differences and institutional factors contribute to systematic differences in situational factors and
management characteristics among countries. This in turn, will be reflected through the level and type
of CSR disclosure, as the management respond to their relevant stakeholders (Van Der Laan Smith et
al., 2010). Thus, CSR reporting in Norwegian/Danish companies is expected to be different from that
in companies in the USA.
This leads to the following hypotheses:
H2: Companies governance structure influences the quality and quantity of CSR disclosure.
H2a: Companies governance structure interacts with culture in influencing the quality and quantity of
CSR disclosure.
CSR and Ownership Structure
Mohd Ghazali (2007) examined the ownership structures of Malaysian firms to see whether these
structures influence the CSR disclosure. She assessed whether ownership concentration, director
ownership or government ownership, in addition to corporate characteristics of 87 non-financial
companies, bear any relationship to a companys CSR disclosure. The regression results show that
two ownership variables, director ownership and governmental ownership, significantly influenced
the CSR disclosures of Malaysian firms. She found that owner-managed companies (i.e. companies in
which the directors hold a higher proportion of equity shares) disclosed significantly less CSR
information, while companies in which the government is a substantial shareholder disclosed
significantly more CSR information in their annual reports. A similar finding was reported by Amran
and Devi (2008), demonstrating that the government plays an important role in increasing the quantity
of CSR information disclosed in the annual reports.
Likewise, Eng and Mak (2003) examined the impact of ownership structure on voluntary disclosure.
They argue that companies having a government link disclosed more voluntary information to
mitigate the higher agency cost and weaker governance of these firms. An analysis carried out on 158
firms in Singapore showed a positive association between the disclosure and a government-linked
company. Accordingly, CSR disclosure of government-owned companies should be high because the
appointed directors of these companies need to align their decisions with the aspirations of the
government and society (e.g. Amran and Devi, 2008; Naser et al., 2006; Donelly and Mulcahy, 2008).
Furthermore, government-owned companies face more pressure from the society than do nongovernment owned companies. Thus, the government-owned companies might use the disclosure as
part of their legitimization strategy. This viewpoint expects a positive relationship between
government ownership and CSR reporting.

However, it is too simplistic to assume that disclosure is used as a legitimization strategy in

government institutions because the accounting system in itself is influenced by institutional factors.
For instance, research evidence from China demonstrates that government or state-owned
organizations face less pressure to voluntarily provide information in their annual reports since the
information should be easily obtainable and accessible from other reporting means. Therefore, this
viewpoint expects the relationship between government ownership and corporate social reporting to
be negative (Huafang and Jiangou, 2007; Xiao et al., 2004).
Thus, we argue that there is a simultaneous relationship between culture and ownership structure in
the CSR reporting model. For example, in a culture where power and political parties play important
roles in business settings, the government influence on CSR is pertinent (Smith et al., 2007).
However, the same situation may not apply to other countries in which business settings are isolated
from the political institutions. This point attests to the importance of cultural and institutional context
in the CSR reporting practice.
Given the above, the relationship between government ownership and CSR reporting is investigated
in this study. The following states the hypotheses:
H3: Government ownership influences the quantity and quality of CSR reporting.
H3a: Culture interacts with government ownership to influence the quantity and quality of CSR
reporting.
3. RESEARCH DESIGN
Country
We examined CSR reporting in China, India, Malaysia and the UK. In order to minimize the
complexities involved in the institutional environments of many countries, these four countries were
chosen for this study. We believe that CSR issues and their relationship to governance structures and
culture are prominent in these countries for four reasons: firstly, China and India are amongst the
largest emerging economies. However, in China, drastic economic growth has caused problems
relating to air quality, land use, water and ecological conservation. This in turn, affects the
neighbouring countries as well as the rest of the world (see Zhang and Wen, 2008; Wang et al., 2008;
Liu et al., 2010). Secondly, China, India and Malaysia have experienced significant reforms in
corporate governance structure. Thirdly, the UK is at a relatively advanced stage in the promulgations
for relevant CSR standards and practices, comparing to the other three countries. Finally, these four
countries represent diverse cultural settings. For example, high power distance exists in Malaysia;
whereas Chinese society is the most collectivist in nature. Appendix 1 presents the national culture
score as presented by Hofstede (2001) for the four countries.
Sample
The sample was obtained from Compustat Global and Mergent Online Database. A total of 203 large
corporations operating in socially and environmentally sensitive industries were selected from the
Compustat Global and Mergent Online database. For several reasons, we controlled for the size and
industry effects in the sample selection process. Firstly, with regard to size, previous literature
generally provides a consensus that large companies are generally good reporters (see Patten, 1992;
Hackston and Milne, 1996; Kolk 2003; KPMG 2005; Owen, 2007). Secondly, large companies face
greater political and public pressures than do small companies due to the resources and profits they
generate. Thirdly, research provide empirical findings that, in general, industry affiliation motivates
social and environmental disclosure; companies operating in environmentally and socially sensitive
industries tend to provide more CSR disclosure than their counterparts reporting (see Halme and
Huse, 1997; Milne and Patten, 2002; Yongvanich and Guthrie, 2005; Deegan and Blomquist, 2006;
Guthrie et al. 2008; Belal, 2008). Thus, drawing upon legitimacy theory, the CSR issue should be
more prominent in large companies operating in socially and environmentally sensitive industries.
8

Specifically, the sample was chosen from eight industries: energy, oil and gas; materials;
manufacturing; transportation; automobiles and components; alcohol, tobacco, casino and gambling;
pharmaceutical, biotechnology and drugs, and utilities. Using data from Compustat Global and
Mergent Online, we ranked all the companies in each country based on their market capitalization.
Companies from the UK, India and Malaysia were selected from the top 100 lists. Chinese companies
were chosen from the top 200 lists because some reports were not in English and could not be used.
We obtained 203 companies from this sampling frame 5. Table 1 (Panel A) tabulates the sample
companies. Overall, the major part of the sample comes from two industries: materials and
manufacturing (47 per cent). Thirteen companies (6.4%) are operating in the socially sensitive
industries (alcohol, tobacco, casino and gambling); while the rest (93.6%) are in environmentally
sensitive industries.
<< Insert Table 1>>
<< Insert Table 2>>

CSR Disclosure
Information on CSR reporting was obtained through content analysis of each of the 2008/2009
company annual reports, CSR stand-alone reports and corporate websites (see Table 2). Annual
reports were obtained from the Mergent Online database and from corporate websites. The relevant
sections of annual reports were printed and all related sections on corporate websites (including the
CSR stand-alone report) were converted to pdf. files and saved6. Content analyses were conducted on
both soft copy and hard copy files. CSR information in annual reports, CSR stand-alone reports and
corporate websites were assessed separately. A total of 403 observations were made including the
annual reports, CSR sections on websites and stand-alone CSR reports.
Table 1 (Panel B) shows that all companies provide CSR disclosure in annual reports. From 203
companies, sixty five per cent (132 companies) have CSR sections in their corporate websites. For
every 10 companies that have corporate websites, 5 provide stand-alone CSR reports 7. However, the
ratio could have been influenced by the number of CSR reports produced by UK companies, which is
relatively high. By country, the UK is ranked first as all the companies have a CSR section in their
corporate websites; 41 of them (82 per cent) have stand-alone CSR reports produced annually. India is
ranked second, followed by Malaysia and China. China and Malaysia respectively produced 22 and
28 CSR sections in their corporate websites; and they produced the same number of CSR stand-alone
reports for the year 2008/2009.
CSR sentences were identified based on a checklist of 65 items, which had been modified from
Global Reporting Initiatives (GRI) indicators. The GRI index was used in this study for several
reasons. Firstly, the GRI provides an internationally recognized framework for CSR reporting (Frost
et al., 2005), which is relevant in a study that examines CSR reporting practices at an international
level. Secondly, using an internationally recognized framework to measure CSR disclosure can enable
the replication of this study. Thirdly, the GRI is comprehensive; it covers all reporting aspects such as
the social, environmental and economic performances. Fourthly, GRI is also considered as the latest

We compare the sample with data from GLOBAL 2000 list (the list ranks the worlds top 2000 companies
based on market capitalization, assets, profit and sales value). All seventy companies which were in GLOBAL
2000 were in our sample. This procedure confirms that we have captured all large corporations operating in the
selected industries.
6
All websites sections were saved in July and August, 2010.
7
The same CSR disclosure was not assessed twice. Thus, we discarded seven corporate websites that had been
duplicated from the corporate annual reports.

and most innovative measure for CSR reporting 8. Finally, previous studies examining CSR issues
such as environmental reporting (e.g. Hasseldine et al., 2005; Van Staden and Hooks, 2007), ethical
and social reporting (e.g. Adams and Kuasirikun, 2000) and sustainability reporting (e.g. ODwyer
and Owen, 2005; Frost et al., 2005) utilized GRI as a framework to develop their disclosure indices.
CSR disclosure was measured using scores for both quantity and quality.
CSR Quantity
To compute CSR quantity, sentences that met the decision criteria were identified and added
according to the categories. Table 3 presents the number of CSR sentences per annual report,
corporate websites and CSR stand-alone report and their combinations. Overall, the disclosure was
substantially about the environment (27%) and labour relations (24 %). Disclosure on society (17.9%)
and CSR profiles of companies (17%) was considerably similar. The least amount of disclosure was
on human rights issues (1.7%). The disclosure pattern in annual reports is significantly different from
that on websites. In the annual reports, disclosure on CSR profiles, the environment, labour and social
issues were relatively the same. In contrast, sentences on websites could be ranked, with the first
relating to environmental matters, followed by labour relations and societal issues. Companies in
China, Malaysia, and India disclosed a very small amount of information concerning human rights
issues.
<< Insert Table 3>>
<< Insert Table 4>>
Table 4 summarises the descriptive statistics of CSR disclosure quantity and quality by countries for
annual report, the CSR section on corporate websites and CSR stand-alone reports and their
combinations. In relation to CSR quantity, UK corporations provided the highest rate of CSR
disclosure for all modes of reporting (mean of 479.38), followed by India, Malaysia and China. This
ranking is consistent with the rate of disclosure on corporate websites. Mean of QuantityWeb (217.46)
is higher than mean of QuantityAR (85.07), indicating that there are more CSR sentences in corporate
websites than in annual reports. The disclosure range in websites is also higher than that in annual
reports, suggesting that the data is widely dispersed, there is a huge difference between a company
that provided the least CSR disclosure and that with the most CSR disclosure. Interestingly, across the
emerging market countries, Malaysia provided the highest amount of CSR in annual reports; whereas,
China consistently provided the least CSR disclosure both in annual reports and corporate websites.
Overall, the results suggest that the setting of CSR reporting is unique in each country.
CSR Quality
The content analysis was extended by scoring each CSR sentence in the report to determine quality.
Each sentence was scored from 0 to 4, with 0 for no disclosure; 1 for general rhetorical statement
or policy stated; 2 for specific endeavour, descriptive information of implementation and
monitoring; 3 for quantitative statement and 4 for the use of targets in addition to publication of
quantified results. Table 5 shows the examples of sentences and their scores.
<< Insert Table 5>>
The score was computed separately for each mode of reporting. Thus, a company could have multiple
scores in separate reports. In the final analysis, we computed a combined score, which took the
highest score in each index. For example, if a company provides disclosure on policy in the annual
report (say on recycling issue), the quality score for the annual report is 2. In its CSR report, the
issue is extended and elaborated to include quantitative information and benchmarking against the
8

The first version of GRI was issued in June 2000; and revised two years later (Frost et al., 2005). The latest
version is available on line as G3
(http://www.globalreporting.org/AboutGRI/WhatIsGRI/History/OurHistory.htm )

10

past years performance. Thus, the score for the CSR report would be 4. Eventually, the combined
score for the index on the recycling issue is also 4 (the highest score for either of the annual report
or the CSR report).
Table 4 also presents the descriptive statistics for the 65-item CSR disclosure index 9. Overall, the
quality scores for CSR disclosure are generally low (total mean of 26.54). The total mean for each
country also reveals a significant difference in CSR quality across countries. In addition, the mean
quality score for CSR stand-alone reports and websites (27.69) is higher than for annual reports
(15.02). The table also presents mean quality using dichotomous scores (QualityAllDic), computed
based on the binary score of '0' and '1'(e.g. Williams 1999; Hanifa and Cooke, 2005)10. Although the
mean of the dichotomous scores is higher than the discrete scores, the pattern of disclosure quality
across country is consistent; the UK provided the highest quality of disclosure, followed by India,
Malaysia and China.
<< Insert Table 6>>
To enhance the richness of our data, we also present CSR quality using a matrix scale, by counting the
number of times in which each category of information appeared in the analysis (see Beck et al.,
2010). For example, if 13 out of 65 items of CSR disclosure have a score of 1, the matrix score for
category 1 will be 20%. Table 6 presents the CSR disclosure using matrix scales by annual report,
corporate websites and their combinations. Panel A shows that, on average, each company scored
64.82% for category 0, indicating that the company did not disclose 42 out of 65 items in the
disclosure index. The highest score for the disclosed items in Annual Reports and Websites was
13.05%, at category 4 (i.e. disclosure with quantitative information in comparison to the last years
performance, benchmarks or standards). This means that overall, the companies either disclose CSR
information at a very high quality, or provide no disclosure at all. However, in the annual reports,
scores for category 1 was the highest; indicating that most companies disclosed CSR information in
the annual report, but at the barest minimum requirement.
Panel B shows some variation in the categories of information for each country. Companies in China
and Malaysia consistently disclosed brief statements on CSR issues (i.e. category 2) in the annual
reports and on corporate websites. Interestingly, companies in India disclosed CSR information of the
best quality (i.e. category 4) in their corporate websites, but not in their annual reports. UK
corporations consistently provided sentences, which were quantitative and comparable with some
benchmarks or the past years performance in both annual reports and corporate websites.
Reliability and Validity of the CSR Reporting Measurement
We undertook three procedures to minimize the subjectivity involved in the measurement process.
Firstly, to ensure consistency, content analysis was conducted based on clearly specified decision
rules. In addition, only one coder (i.e. the first author) conducted the content analysis throughout the
whole research period. Secondly, reliability tests were performed by having two additional coders,
who repeated all the processes in the content analysis. Each coder analysed 20 companies, with
correlation results of 0.8 and 0.9 respectively. Thirdly, to ensure accuracy, our disclosure scores were
compared with the GRI grades awarded to the company being studied 11. The correlation tests show a
significant positive relationship between our quality scores and the GRI grades (p=0.000), indicating
that our instruments are perfectly matched with those given by the professional organizations. Finally,
as the dichotomous scores are arguably less subjective than the weighted scores, correlation test

The maximum score for each item in the index is 4. However, some items have less than four scales (see
Hooks and van Staden (2011) and van Staden and Hooks (2007)). Thus, maximum score can be given for a
company is 236. Results were converted to a percentage.
10
Maximum score can be given for a company is 65. Results were presented in percentage.
11
From 203 companies, 33 companies (16.3%) used GRI as a framework to prepare CSR reports.

11

between CSRQualityAll and CSRQualityDic was computed. A correlation of 0.849 (p=0.000) was
found, indicating a high level of accuracy.
Independent Variables
Independent variables in this study are corporate governance, government ownership and national
culture. Although we acknowledge that corporate governance can be measured using various
measurements (see Larcker et al., 2007), we only take two constructs: board composition and the
existence of a CSR committee on the board. Government ownership is measured based on a
dichotomous scale of 1 for companies with government shares of more than 50% and 0 for
privately owned companies. These variables were obtained from annual corporate reports. Finally,
national culture variables are measured based on individualism, power distance, uncertainty avoidance
and masculinity index (Hofstede, 1991; Hofstede, 2001; see current studies that use these indices:
Jansen et al. 2009; Waldman et al. 2006; Smith, 2006; Kim and Gray, 2009; Tang and Koveos, 2008).
Control Variables
This research incorporates five control variables in the regression analysis:CSR assurance statement,
Big-4 auditor, listing status, proportion overseas subsidiaries, and market capitalization (proxy for
size). These variables are motivated from previous research (see Wang et al., 2008; Webb et al., 2008;
Simnett et al., 2009; Cheung et al., 2010). All the variables, their measurements and source of
information have been presented in Table 2.
Table 7 presents descriptive results for all the independent and control variables. Of particular interest
is the mean for Big 4 Auditor (0.744). This value shows that 74.4% of the annual reports in the
sample were audited by the auditors from Big4 firms. In particular, all 50 companies in the UK have
Big4 firms as their auditors. Variance for market capitalization is high, probably resulting from the
Chinese firms which have been selected from the top 200 lists. Finally, the mean of government
shares (0.167) includes the UK corporations, which are all privately owned companies.
<< Insert Table 7>>
<< Insert Table 8>>
Table 8 presents correlations among the independent variables 12. Overall, there is no serious
multicollinearity problem among the independent variables (no correlation of greater than 0.7, except
for the national culture variables and government ownership). Initial tests reveal multicollinearity
amongst the four national culture variables. As a result, only two cultural variables (i.e. individualism
and masculinity) were included in the multivariate test. GovtShares and GovtDic were also correlated
at 0.903. Thus, one of the proxies was excluded in the multivariate analysis. In particular, the
existence of CSR board committees, CSR assurance, board composition and proportion of overseas
subsidiaries are associated significantly with the country and its national culture variables. These
relationships indicate that choices of governance structure differ from one country to another. In other
words, country differences play a role in governance structure choice. Likewise, variables such as;
Big4 auditors, proportion of overseas subsidiaries and government ownership also differ between
countries. The implications of this result are examined in the hypothesis testing section.
4. RESULTS
Regression Results

12

Of interest, Table 8 also presents two variables that have been controlled for in the sample selection process
(i.e. industry and country)

12

All the independent variables are regressed separately against CSR quality and quantity. There are six
models in the regressions tests: CSR quality obtained from annual reports (QualityAR), CSR quality
obtained from corporate websites and CSR stand-alone reports (QualityWeb), total CSR quality
(QualityAll), CSR quantity obtained from annual reports (QuanAR), CSR quantity obtained from
CSR stand-alone reports and corporate websites (QuantityWeb) and total CSR Quantity
(QuantityAll). The results are summarized in Table 9.
<< Insert Table 9>>
Regarding the quality of CSR disclosure, Table 9 (Panel A) demonstrates that overall, the model for
CSR quality has a greater explanatory power than that of CSR quantity (adjusted R2 of 67.8% and
57.0% respectively). The existence of CSR board committee, CSR assurance statement and listing
status enhance both the quality and quantity of CSR disclosures in all modes of reporting.
Individualism influences CSR reporting negatively; i.e. the more collectivist the society, the less the
quality of CSR disclosure. This could be the result of the secretive nature of a collectivist society
(Gray, 1988). The table shows Govt correlates positively with QualityAR and QualityAll, indicating
that non-government owned companies disclosed CSR information in a quality which is higher than
the government-owned companies. In relation to the quantity of CSR disclosure, the proportion
overseas subsidiaries could enhance the number of sentences disclosed in all reports. Consistent with
the theory, the existence of Big4 auditors enhances the quality and quantity of CSR disclosure in
annual reports only. Overall, we found supports for H1a, H2a and H3a.
The analysis was extended by conducting regression tests for each country (Panel B). Overall, results
show that CSR assurance consistently enhances the quality of CSR disclosure in all countries;
whereas listing status improves the quality of CSR disclosure in emerging markets. Specifically, the
existence of CSR board committees enhances the quality of CSR disclosure in China, but not in other
countries. In Malaysia, government-linked companies and big corporations disclosed CSR
information of a quality which is higher than their small, non-government counterparts. With regard
to the quantity of CSR information originating from Malaysia, the number of CSR sentences disclosed
in all reports increases according to board composition. Whereas in China, companies that are owned
by the government, and whose corporate reports have been audited by Big4 Auditors, are inclined to
provide CSR sentences in their reports. Finally, in India, CSR disclosures in the big corporations are
more than that of the small corporations.
<< Insert Table 10>>
The last test involved interaction variables. Since previous tests indicated that individualism and CSR
reporting are significantly associated, individualism is multiplied by CSR board committees and
GovtShares respectively. The new variables are regressed against CSR disclosure quality and
quantity. In relation to Hypothesis 2, Table 10 (Panel A) shows that the presence of a CSR board
committee enhances the quality of CSR disclosure for companies operating in society which is
collectivist, as opposed to individualistic (positive correlations values for QualityWeb and QualityAll
are 2.578 and 2.654 respectively). Therefore, H2b is supported. However, Table 10 (Panel B) does not
show any support for H3b.
Robustness Tests
To check for the robustness of our results, we run regression tests using the data which was
categorized into specific groups. For H2b, we split the data into two: companies with CSR board
committees, and companies without CSR board committees. For H3b, separate regression tests were
performed on two groups: companies that are owned by the government and those that do not. The
results indicate that the presence of CSR board committees in non-government owned companies
enhances the quality and quantity of CSR information. The similar was not found in the governmentowned companies. In addition, we found that the non-government owned companies operating in
13

society which is individualistic disclosed high quality and quantity of CSR information in all modes
of reporting. The robustness tests support H3b.
5. DISCUSSION AND CONCLUSION
This paper provides data on the CSR reporting practices across China, India, Malaysia and the UK.
First, we examine whether the quality and quantity of CSR disclosure differs from one country to
another, and whether cultural variables explain CSR reporting practice. Second, we investigate the
extent to which governance structure and government ownership influence the quality and quantity of
CSR disclosure. Third, we test the interaction of cultural variables with governance structure and
government ownership.
In relation to the first objective, results of content analyses show several interesting findings. Firstly,
we find that the number of CSR sentences disclosed in corporate websites is greater than the number
disclosed in annual reports. In annual reports, the level of disclosure was minimal, whereas in the
corporate websites, the disclosures provided were of higher quality. This finding is consistent with
previous findings (e.g. Frost et al., 2005), suggesting that the preparers of corporate reports manage
the information by disclosing information which is relevant to user needs. Annual reports are prepared
for the shareholders, who are interested in the economic performance of a company. Thus, voluntary
information such as that of CSR disclosures are in websites or in CSR-stand-alone reports, more than
in the annual report (e.g. see Rowbottom et al., 2009). Furthermore, placement of information within
an annual report contains a weak form of assurance because auditors must judge whether all
disclosures within the annual report are consistent with the audited financial information (Fisher et al.,
2004). Accordingly, companies are less likely to provide detailed information in their annual reports.
This finding highlights that research on CSR disclosure should also consider website reporting to
avoid presenting an incomplete picture of CSR activities of corporations.
Secondly, with respect to the measurement of CSR disclosure, the mean quality of the unweighted
scores is higher than the mean of weighted scores. Hence, it is suggested that interpretations of
researchers about CSR disclosure practice of corporations depend on the CSR disclosure
measurement. In addition, results for disclosure scores using the matrix scale indicate that on average,
the corporations involvement in CSR reporting can be grouped into two: active reporters and
emerging reporters. Active reporters are those whose disclosure of CSR ranks highly both in quality
and quantity; whereas, the emerging reporters are those who engaged in CSR reporting, but with
lower quality and quantity. Finally, consistent with Hooks and van Staden (2011), we also find that
quality and quantity of CSR disclosures are highly correlated.
For the second objective, we find that the existence of a CSR board committee influences CSR
reporting positively. Thus, we suggest that CSR reporting is enhanced by the presence of CSR board
committees. The presence of a committee shows a companys concern to legitimize their social and
environmental reputation (Neu et al., 1998; Wahyuni et al., 2009). Companies which engage their
directors as members of the CSR committee are more committed in providing CSR disclosure. In the
overall sample, supports for the influence of government affiliation on CSR reporting are inconsistent.
Perhaps, CSR reporting of these corporations are not determined by the shares the government has in
these corporations.
In relation to control variables, both the quality and quantity of CSR disclosure increase with the
existence of assurance statement. It is suggested that companies prepare the assurance statement to
enhance the credibility of the CSR information. In addition, companys involvement in the CSR
reporting is determined by its level of globalization; the more complex the business structure, the
higher the corporate involvement in CSR reporting. In a sense, the CSR reporting agenda is a global
issue. Thus, companies involvement in CSR agenda reflects their legitimacy to stakeholder
constituents at the global level. This argument supports institutional theory.

Finally, with respect to cultural issues, the negative relationship between individualism and CSR
disclosure indicates that CSR reporting is prominent in countries in which the society is
14

individualistic (Table 9). However, the relationship with the interaction of individuality and
committees is positive, indicating that with the presence of CSR board committees, CSR reporting is
significant in countries in which the society is collectivist (Table 10). Specifically, the existence of
CSR board committees is more effective in China than in other countries, possibly because the
Chinese society is the most collectivist. In Malaysia, government-owned corporations disclosed CSR
information of a quality higher than that of their non-government counterparts. These results imply
that the CSR reporting practice in Malaysia is greatly influenced by the governments involvement in
the CSR agenda.
Data on the institutional backgrounds of these countries adds to the explanation of the results. Firstly,
CSR practices in the UK are at quite an advanced stage. Previous research relates the development of
CSR reporting in the UK to the development of Value-added statement (VAS) (see Burchell et al.,
1985). UK corporations prepared VAS statement since the 1970s. Hence, the development of
standards pertaining to CSR issues is more in evidence than in other countries. For example, the
Companies Act 2006 requires disclosure of the impact of a companys operations on the community
and the environment. Some disclosures with regard to employees and corporate risk (including
environmental risk) have also been made mandatory (ICAEW, 2009). The advanced involvement in
CSR issues as well as the existence of these laws may have influenced the CSR reporting practice in
the UK.
Secondly, India has some mandatory requirements pertaining to CSR issues. For instance, section 217
and 217 (2A) of the Companies Act of 1957 mandated a disclosure on the Conservation of Energy and
details of employees. The extent to which the existence of these laws influences CSR reporting as
practiced in India could be explained from the perspective of culture. To illustrate, the key aspects of
the Indian social life are influenced by the caste system and hierarchy. There is respect for elders and
authority, with key decisions made by, usually, the elder males in family (Verma and Gray, 2009).
Therefore, due to the importance of hierarchy or the caste system in India, the legal regulation of
accounting is apparent in India. For example, when faced with accounting choice, India prefers legal
means to do so (Verma and Gray 2009). This explains why Indian corporations appear to be advanced
reporters amongst the emerging markets. Furthermore, India has the worlds most significant business
processes and IT service providers (Rajagopalan and Zhang, 2008). Thus, the corporations are likely
to disclose CSR information voluntarily in their corporate websites because they already have the
CSR data in place (in response to the mandatory requirements on the CSR disclosure).
Thirdly, Malaysian corporations provide the highest number of CSR sentences in annual reports. This
could be the result of the Bursa Malaysia requirement, which provides a framework describing how
CSR information should be disclosed in the corporate annual report. In addition, the findings show
that there is a significant association between government affiliation and CSR reporting in Malaysia.
The business settings in Malaysia can explain this finding. To illustrate, the New Economic Policy
(NEP) has resulted in many Government-Linked Companies (GLCs) becoming relatively large
corporations. These companies face social legitimacy to a greater extent than their non-government
counterparts because they are operating using government resources and capital. From a sociopolitical viewpoint, their operations reflect the commitment of the ruling party.
Finally, the cultural context may also explain why the existence of CSR board committee is more
effective in China than other countries. The results imply that a collectivist society prefers a unique
governance mechanism to enhance CSR reporting. In relation to this issue is the teachings of
Confucius, which have fostered the values and norms of the Chinese society; and this includes
accounting practice. For example, the principle of wulun emphasizes the respect for authority and the
unequal relationship in Chinese culture; in which superiors are expected to exercise their autocratic
power and followers would submit to every decision made by the superiors (Tsui, 2001). Accordingly,
the existence of CSR board committees is effective in China because it suits the local Chinese culture.
Limitations
This research should be interpreted with several limitations. Firstly, as stated earlier, this research
aims to provide comprehensive, hand-collected CSR data in four countries. Hence, generalizability of
15

the research findings is limited to the countries being studied. Findings are also limited to a single
time frame. Secondly, due to the nature our sample frame, we were not able to examine governmentowned corporations in the UK. Finally, aspects of culture are assessed from Hofstedes cultural
taxonomies; thus, limitations in Hofstedes literature might be inherited by this study. Nevertheless,
we have provided data on the institutional background of the countries to compensate for this
limitation
Future research
We suggest that researchers should consider the organizational and institutional background of a
society before making generalizations on the effects of culture in the CSR reporting model. For
example, why are relevant CSR regulations absent in China? Is it because the country has never been
colonized by countries outside its main cultures? Or is it because the country wants unique
regulations? As for India, did the British colonization in the 1950s influence the promulgation of
relevant CSR standards in the country? To what extent are the relevant standards on CSR issues in
India similar to the UK? To answer these questions, future studies may consider an interpretive
approach; issues surrounding the development of relevant CSR standards, historical, cultural and
social settings of these countries are worth exploring. Furthermore, a thorough analysis should also be
conducted to explore why culture, governance structure and CSR reporting are interrelated. Future
studies may also consider internal aspects of reporting.
Contribution
Overall, our findings demonstrate the effect of culture in the CSR reporting model. We also find the
CSR reporting in each country is unique and specific to the institutional background of the countries.
The findings confirm institutional theory by demonstrating that CSR reporting is institutionalized.
More importantly, it demonstrates the capability of this theory to describe both the homogeneity and
heterogeneity in accounting practice. Thus, it is suggested for policy makers to draft a policy which
suits the local culture. For example, to ensure the homogeneity in CSR reporting, the existence of
CSR board committees should be made compulsory in a collectivist society. Such a regulation is not
seen as appropriate in an individualistic society because that society will voluntarily form CSR
committees regardless of policy; perhaps, this is the nature of an individualistic society which governs
the way in which their managers behave.

16

REFERENCES
Adams, C.A. 2002. Internal organizational factors influencing corporate social and ethical
reporting: Beyond current theoretising. Accounting, Auditing and Accountability Journal;
15(2), pp. 223-250
Adams, C.A. and Kuasirikun, N. 2000.A comparative analysis of corporate reporting on ethical
issues by UK and German chemical and pharmaceutical companies. The European
Accounting Review; 9 (1), pp. 53-79
Adams, C.A. and Larrinaga-Gonzalez, C. 2007.Engaging with organizations in pursuit of
improved sustainability accounting and performance. Accounting, Auditing and
Accountability Journal; 20(3), pp. 333-355.
Amran, A. and Devi, S.S. 2008. The impact of government and foreign affiliate on corporate
social reporting: The case of Malaysia. Managerial Auditing Journal; 23 (4), pp. 386-404.
Ball, A. and Craig. R. 2010. Using neo-institutionalism to advance social and environmental
accounting. Critical Perspectives on Accounting; 21,4,pp. 283-293
Bebbington, J. and Gray, R. 2001. An account of sustainability: failure, success and
reconceptualization. Critical Perspectives on Accounting; 12 (5), pp. 557-588
Belal, A.R. 2008.Corporate social responsibility reporting in developing countries. Ashgate, First
Edition
Bradley, M., Schipani, C. A., Sundram, S.K., Walsh, J.P. 1999. The purposes and accountability
of the corporation in contemporary society: Corporate governance at a crossroads. Law
and Contemporary Problems; 62 (3), pp. 9-86
Buhr, N. and Freedman, M. 2001. Culture, institutional factors and differences in environmental
disclosure between Canada and the United States. Critical Perspectives on Accounting;
12, pp. 293-322.Burchell, S., C. Clubb. 1985. Accounting in its social context: Towards a
history of value added in the United Kingdom. Accounting, Organizations and Society;
10 (4), pp. 381-413.
Chau. G.K. and Gray, S.J. 2001. Environmental influences on voluntary disclosures in the annual
reports of Hong Kong and Singapore Companies: A cultural perspective. Asian Review of
Accounting; 9 (1), pp. 104-127.
Chen, C.J.P. and Jaggi, B. 2000.Association between independent non-executive directors, family
controls and financial disclosure in Hong Kong. Journal of Accounting and Public Policy;
19 (4-5), pp. 285-310
Cheung Y.L. Jiang, P. and Tan, W. 2010. A transparency disclosure index measuring disclosures:
Chinese listed companies. Journal of Accounting and Public Policy; 29,3; pp. 259-280.
Cooper, C., Taylor, P., Smith, N. and Catchpowle, L. 2005. A discussion of the political potential
of social accounting. Critical Perspectives on Accounting; 16, pp. 951-974
Deegan, C. and Blomquist, C. 2006. Stakeholder influence on corporate reporting: an exploration
of the interaction between WWF-Australian and the Australian minerals industry.
Accounting, Organizations and Society; 31 (2006), pp. 343-372
Deegan, C. and Soltys, S. 2007. Social accounting research: An Australian perspective.
Accounting Forum; 31, 1, pp. 73-89.
DiMaggio, P.J. and Powell, W.W. 1983. The iron cage revisited-institutional isomorphism and
collective rationality in organizational field. American Sociological Review; 48 (2), pp.
147-160
Doidge, C., Andrew, K.G. and Stulz, R.M. 2007. Why do countries matter so much for corporate
governance? Journal of Economics; 86 (1), pp. 1-39
17

Donnelly, R. and Mulcahy, M. 2008. Board structure, ownership, and voluntary disclosure in
Ireland. Corporate Governance; 16 (5), pp. 416-429
Eng, L. and Mak. Y. 2003. Corporate governance and voluntary disclosure. Journal of Accounting
and Public Policy; 22, pp. 325-345
Fama, E.F. and Jensen, M.C. 1983. Separation of Ownership and Control. The Journal of Law
and Economics; 25, pp. 301-325
Fisher, P. Oyelere and F. Laswad. 2004. Corporate reporting on the Internet: Audit issues and
content analysis of practices. Managerial Auditing Journal;19 (3), pp. 412439.
Frost, G., Jones, S. Loftus, J. and van Der Laan, S. 2005. A survey of sustainability reporting
practices of Australian reporting entities. Australian Accounting Review; 15 (1), pp. 89-96
Gray, R. 2002. The social accounting project and Accounting Organizations and Society:
Privileging engagement, imaginings, new accountings and pragmatism over critique?
Accounting Organizations and Society; 27, pp. 687-208
Gray, R., Bebbington, J. and Walters, D. 1993.Accounting for the environment. London: Paul
Chapman
Gray, R., Kouhy, R. and Lavers, S. 1995a. Corporate social and environmental reporting: A
review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing
and Accountability Journal;8 (2), pp. 47-77.
Gray, S.J. 1988. Towards a theory of cultural influence on the development of accounting system
internationally. Abacus; 24 (1), pp. 1-15.
GRI Website_Global Reporting Initiative (GRI) Sustainability Reporting Guidelines Third
Edition.www.globalreporting.org/G3/
Guthrie, J. and Boedker, C. 2006. Perspectives on new models of business reporting: A
reflective note. Accounting, Auditing and Accountability Journal; 19 (6), pp. 785-792
Guthrie, J., Cuganesan, S. and Ward, L. 2008. Industry specific social and environmental
reporting: the Australian food and beverage industry. Accounting Forum; 32, pp. 1-15
Guthrie, J., Cuganesan, S. and Ward, L. 2008. Industry specific social and environmental
reporting: the Australian food and beverage industry. Accounting Forum; 32, pp. 1-15
Hackston, D. and Milne, M.J. 1996. Some determinants of social and environmental disclosures
in New Zealand companies. Accounting, Auditing and Accountability Journal; 9(1), pp.
77-108.
Halme, M. and Huse, M. 1997.The influence of corporate governance, industry and country
factors on environmental reporting. Scandanian Journal of Management; 13 (2), pp. 137157
Haniffa, R.M. and Cooke, T.E. 2002.Culture, corporate governance and disclosure in Malaysian
corporations. Abacus; 38 (3), pp. 317-349.
Haniffa, R.M. and Cooke, T.E. 2005.The impact of culture and governance on corporate social
reporting. Journal of Accounting and Public Policy; 24, pp. 391-430
Harrison, G.L. and McKinnon, J.L 1986. Culture and accounting change: A new perspective on
corporate reporting regulation and accounting policy formulation. Accounting,
Organizations and Society; 11,3, pp. 233-252.
Hasseldine, J., Salama, A.I. and Toms, J. S. 2005. Quantity versus quality: the impact of
environmental disclosures on the reputations of UK Plcs. The British Accounting Review;
37, pp. 231-248

18

Ho, S.S.M., Wong, K.S., 2001. A study of the relationship between corporate governance
structures and the extent of voluntary disclosure. Journal of International Accounting,
Auditing and Taxation.10, pp.139156.
Hofstede, G. 1980. Cultures consequences: International differences in work-related values.
Beverly Hills, CA: Sage.
Hofstede, G. 1991. Cultures and organizations: software of the mind. McGraw Hills, England.
Hofstede, G. 2001. Cultures consequences: comparing values, behaviors, institutions and
organizations across nations (2nded.).Thousand Oaks, CA: Sage
Holland, L. and Foo, Y. B. 2003. Differences in environmental reporting practices in the UK and
the US: the legal and regulatory context. The British Accounting Review; 35, pp. 1-18
Hooks, J. and C. J. van Staden. 2011. Evaluating environmental disclosure: The relationship
between quality and extent measures; The British Accounting Review; forthcoming.
Huafang, X. and Jianguo, Y. 2007. Ownership structure, board composition and corporate
voluntary disclosure: Evidence from listed companies in China. Managerial Auditing
Journal; 22 (6), pp. 604-619
Institute of Chartered Accountants in England and Wales (ICAEW). 2009. Environmental Issues
and Annual Financial Reporting.
Jansen, E.P. Merchant, K. A. and van der Stede, W.A. 2009. National differences in incentive
compensation practices: the differing roles of financial performance measurement in the
United States and the Netherlands. Accounting, Organizations and Society; 34, pp. 58-84
Jones, M.J. 2010.Accounting for the environment: Towards a theoretical perspective for
environmental accounting and reporting. Accounting Forum; 34, 2, pp.123-138
Kamla, R. 2007. Critically Appreciating social accounting and reporting in the Arab Middle East:
A postcolonial perspective. Advances in International Accounting; 20, pp. 105-177
Kelton, A.S. and Yang, Y. 2008. The impact of corporate governance on Internet financial
reporting. Journal of Accounting and Public Policy; 27, pp. 62-87
Kim, Y. and Gray, S.G. 2009. An assessment of alternative empirical measures of cultural
distance: Evidence from the Republic of Korea. Asia Pacific Journal of Management; 26,
pp.55-74
Kolk, A. 2003.Trends in sustainability reporting by the Fortune Global 250.Business Strategy and
the Environment; 12(5), pp. 279-291.
KPMG,

2005.International survey of corporate responsibility reporting. Amsterdam:

KPMG.(http://www.kpmg.com.au/Portals/0/KPMG%20Survey%202005_3.pdf)

Larcker, D. F., Richardson, S. A. and Tuna, I. 2007.Corporate Governance, accounting outcomes,

and organizational performance. The Accounting Review; 82 (4), pp. 963-1008
Liu, X. Liu, B. Shishime, T., Yu, Q., Bi, J., Fujitsuka, T. 2010. En empirical study on the driving
mechanism of proactive corporate environmental management in China. Journal of
Environmental Management; 91, 8, pp. 1707-1717
Lounsbury M. 1997. Exploring the institutional tool kit.The rise of recycling in the U.S. solid
waste field. American Behavioural Scientist; 40, 4, pp. 46577.
Mathews, M.R. 1997. Twenty-five years of social and environmental accounting research: is there
a silver jubilee to celebrate? Accounting, Auditing and Accountability Journal; 10 (4), pp.
481-531
Milne, M.J. and Patten, D.M. 2002.Securing organizational legitimacy and experimental decision
case examining the impact of environmental disclosures. Accounting, Auditing and
Accountability Journal; 15 (3), pp. 372-405
19

Mohd Ghazali, N. A. 2007. Ownership structure and corporate social responsibility disclosure:
some Malaysian evidence. Corporate Governance; 7 (3), pp. 251-266.
Naser, K., Al-Hussaini, A., Al-Kwari, D. and Nuseibin, R. 2006. Determinants of corporate social
disclosure in developing countries: the case of Qatar. Advances in International
Accounting; 19, pp. 1-23
Neu, D., Warsame, H., and Pedwell, K. 1998. Managing public impressions: Environmental
disclosures in annual reports. Accounting, Organizations and Society; 23 (3), pp. 265-282
ODwyer, B. And Owen, D.L. 2005. Assurance statement practice in environmental, social and
sustainability reporting. The British Accounting Review; 37, pp. 205-229
Owen, D. 2007. Chronicles of wasted time? A personal reflection on the current state of, and
future prospects for, social and environmental accounting research. Accounting, Auditing
and Accountability Journal; 21(2), pp. 240-267.
Owen, David. 2008. Chronicles of wasted time? A personal reflection on the current state of, and
future prospects for, social, and environmental accounting research; Accounting, Auditing
and Accountability Journal; 21 (2), pp. 240-267
Parker, L. D. 2011.Twenty-one years of social and environmental accountability research: A
coming of age. Accounting Forum; 35, 1, pp. 1-10
Patten, D.M. 1992. Intra-industry environmental disclosures in response to the Alaskan oil spill:
A note on legitimacy theory. Accounting, Organizations and Society; 17(5), pp. 471-475.
Qu, W. and Leung, P. 2006. Cultural impact on Chinese corporate disclosure-a corporate
governance perspective. Managerial Auditing Journal; 21 (3), pp. 241-264
Rahaman, A. S., Lawrence, S. and Roper, J. 2004. Social and environmental reporting at the
VRA: institutionalized legitimacy or legitimation crisis? Critical Perspectives on
Accounting; 15, pp. 35-56
Rajagopalan, N. and Zhang, Y. 2008. Corporate governance reforms in China and India:
Challenge and opportunities. Business Horizons; 51, pp. 55-64
Rowbottom, N. and Lymer, A. 2009.Exploring the use of online corporate sustainability
information. Accounting Forum; 33, pp. 176-186
Silberhorn, D. and Warren, R.C. 2007.Defining corporate social responsibility: A view from big
companies in Germany and the UK. European Business Review; 19 (5), pp. 352-372.
Simnett, R., Vanstraelen, A. and Chua, W.F. 2009. Assurance on sustainability reports: An
international comparison. The Accounting Review; 84(3), pp. 937-966.
Smith, P.B. 2006. When elephants fight, grass gets trampled: the GLOBE and Hofstede projects.
Journal of International Business Studies; 37, pp. 915-921
Tang, L. and Koveos, P.E. 2008. A framework to update Hofstedes cultural value indices:
economic dynamics and institutional stability. Journal of International Business Studies;
39, pp. 1045-1063
Tsui, J.S.L. 2001. The impact of culture on the relationship between budgetary participation,
management accounting systems, and managerial performance: An analysis of Chinese
and Western managers. The International Accounting Journal; 36, pp. 125-146.
Unerman, J. 2000. Methodological issues: reflections on quantification in corporate social
reporting content analysis. Accounting, Auditing and Accountability Journal; 13 (5), pp.
667-680
Van Der Laan Smith, J., Adhikari, A. and Tondkar, R.H. 2005. Exploring differences in social
disclosures internally: A stakeholder perspective. Journal of Accounting and Public
Policy; 24, pp. 123-151
20

Van der Laan Smith, J., Adhikari, A., Tondkar, R.H. and Andrews, R.L. 2010. The impact of
corporate social disclosure on investment behavior: A cross-national study. Journal of
Accounting and Public Policy;29, pp. 177-192
Van Staden, C.J. and Hooks, J. 2007. A comprehensive comparison of corporate environmental
reporting and responsiveness. The British Accounting Review; 39, pp. 197-210

Verma, S. and S. J. Gray. 2009. The development of company law in India: The case of
the Companies Act 1956. Critical Perspectives on Accounting; 20(1), pp. 110135.
Wahyuni, D. Rankin, M. and Windsor, C. 2009. Towards emissions trading: the role of
environmental management systems in voluntarily disclosing greenhouse gas emissions.
Paper presented at AFAANZ Conference 2009, Adelaide, Australia
Waldman, D., De Luque, M.S., Washburn, N. and House, R.J. 2006. Cultural and leadership
predictors of corporate social values of top management: a GLOBE study of 15 countries.
Journal of International Business Studies; 37, pp. 823-837
Wang, K., Sewon, O. and Claiborne, M.C. 2008. Determinants and consequences of voluntary
disclosure in an emerging market: Evidence from China. Journal of International
Accounting, Auditing and Taxation; 17, pp. 14-30
Wang, M., Webber, M., Finlayson, B. and Barnett, J. 2008.Rural industries and water pollution in
China. Journal of Environmental Management; 86, pp. 648-659.
Webb, K. A, Cahan, S.F. and Sun, J. 2008. The effect of globalization and legal environment on
voluntary disclosure. International Journal of Accounting; 43 (3), pp. 219-245.
Williams, S. M. 1999. Voluntary environmental and social accounting disclosure practices in the
Asia-Pacific region: An international empirical test of political economy theory. The
International Journal of Accounting; 34 (2), pp. 209-238.
Williams, S.M. 2004. An international investigation of associations between societal variables
and the amount of disclosure on information technology and communication problems;
the case of Y2K.The International Journal of Accounting; 39, pp. 71-92
Williams, S.M. and Pei, C.H.W. 1999. Corporate social disclosures by listed companies on their
Websites: An international comparison, International Journal of Accounting ;34 (3), pp.
389419.
Withrop, R.H. 1991. Dictionary of concepts in cultural anthropology. Green World Press, USA.
Xiao, J.Z., Gao, S.S., Heravi, S. and Cheung, Y.C. Q. 2005. The impact of social and economic
development on corporate social and environmental disclosure in Hong Kong and the
U.K. Advances in International Accounting; 18, pp. 219-243
Xiao, J.Z., He, Y. and Chow, C.W. 2004.The determinants and characteristics of voluntary
internet-based disclosures by listed Chinese companies. Journal of Accounting and Public
Policy; 23, pp. 191-225
Yongvanich, K. and Guthrie, J. 2005. Extended performance reporting: an examination of the
Australian mining industry. 2005. Accounting Forum; 29, pp. 103-119
Zhang, K. and Wen, Z. 2008. Review and challenge of policies of environmental protection and
sustainable development in China. Journal of Environmental Management; 88, pp. 12491261

21

Figure 1: Theoretical Framework

Coercive isomorphism

Cultural/social norms
Institutional layer

Cultural/social norms
Organizational
layer

Normative isomorphism

Mimetic isomorphism

22

Table 1: Sample
Panel A: Sample by Industry and Country
China
Industry

India

Number

Percent

Malaysia

Number

Percent

Number

UK
Percent

Total

Number

Percent

Number

Percent

Energy Oil and

Gas
Materials

14

15.38

9.80

12

26

12.808

12

24

20

38.46

15.69

18

49

24.138

Manufacturing

13

26

12

23.08

11

21.57

10

20

46

22.66

Transportation

18

1.92

17.65

23

11.33

Automobiles and
Components
Alcohol,
Tobacco, Casino
and Gambling
Pharmaceutical,
Biotechnology
and Drugs
Utilities

5.77

9.80

12

5.9113

1.92

11.76

10

13

6.4039

7.69

1.96

12

11

5.4187

10

5.77

11.76

18

23

11.33

50

100

52

100

51

100

50

100

203

100

TOTAL

Panel B: Sample by Reports

Country

Sample

CSR information
in A/R

CSR section
available in
website

Separate CSR
Report available
On Line

Total Observations

China

50

50

22

80

India

52

52

32

11

95

Malaysia

51

51

28

87

UK

50

50

50

41

141

TOTAL

203

203

132

68

403

23

Table 2: Variable Measurements and Source of Information

Variables

Symbol

Operationalization

Year

Source of
information

CSR Quality in Annual Report

QualityAR

Content analysis (score of 0 to 4)

2008/2009

Annual report

CSR Quality in CSR standalone reports and corporate

websites
CSR Quality in all reports

QualityWeb

Content analysis (score of 0 to 4)

2008/2009

Corporate Websites

QualityAll

2008/2009

Annual
report/websites

CSR Quality in all reports

QualAllDic

2008/2009

CSR Quantity in Annual Report

QuantityAR

2008/2009

Annual
report/websites
Annual report

CSR Quantity in CSR standalone reports and corporate

websites
CSR Quantity in all reports

QuantityWeb

Content analysis (Maximum

score for each item in CSR
index)
Score in QualityAll is converted
to '0' and '1'
Content analysis (sentences
counting)
Content analysis (sentences
counting)

2008/2009

Corporate Websites

QuantityAll

Content analysis (sentences

counting)

2008/2009

Annual
report/websites

Board composition

BC

2008/2009

Existence of CSR committee in

board

COM

Ratio of non-executive directors

to total number of directors on
the board
If a company has CSR
committee-Dichotomous

Annual
Report/Mergent
Online
Annual report (handcollected)

If shareholding is owned by the

government/state-dichotomous
Proportion of shares owned by
government

2008/2009

Dependent variables:

Independent variables:
Corporate Governance:

2008/2009

Government Ownership:
Government Dichotomous

Govt_Dic

Government shares

Govt_Shares

2008/2009

Annual report (handcollected)

Annual report (handcollected)

National Culture:
Individualism

IND

Index, by country

2001

Hofstede, 2001

Power Distance

PD

Index, by country

2001

Hofstede, 2001

Uncertainty Avoidance

UA

Index, by country

2001

Hofstede, 2001

Masculinity

MAS

Index, by country

2001

Hofstede, 2001

BIG4auditor

BIG4

If a company is audited by Big-4

Audit firms-dichotomous

2008/2009

CSR assurance statement

ASS

2008/2009

Listing

LIST

If a company has an assurance

statement for CSR report
If a company is listed overseasDichotomous

Subsidiaries

SUB

2008/2009

Industries*

Ggroup

Proportion of overseas
subsidiaries in relation to total
number of subsidiaries
Industry affiliation

2008/2009

Annual
report/Mergent
Online
Annual report (handcollected)
Annual
report/Mergent
Online
Annual
report/Mergent
Online
Compustat Global

Country*

COUN

Country where a company based

2008/2009

Compustat Global

Market Capitalization*

MCAP

Number of shares outstanding

times prices (in USD)

2008/2009

Compustat Global

Control Variables:

*These variables have been controlled in the sample selection process

24

2008/2009

Table 3: Quantity of CSR Disclosure: number of sentences disclosed

Panel 1

Panel 2

Panel 3

Quantity of Annual Report

Quantity of CSR Stand-alone reports and websites

Quantity of All Reports

China

India

China

735
511
630
0
292
62
404
2634

1923
1615
1080
224
389
309
1193
6733

Categories

China

India

Malaysia

Env.
Society
LR
HR
PR
Econ
Profiles
Total

236
118
331
14
58
292
458
1507

634
1036
1006
7
128
450
720
3981

681
871
1004
3
373
807
788
4527

UK

All

1656
1033
2218
182
225
380
1561
7255

3207
3058
4559
206
784
1929
3527
17270

25

Malaysia

1338
688
570
57
120
31
480
3284

UK

5408
2511
4244
311
1448
330
2462
16714

All

9404
5325
6524
592
2249
732
4539
29365

971
629
961
14
350
354
862
4141

India

2557
2651
2086
231
517
759
1913
10714

Malaysia

UK

2019
1559
1574
60
493
838
1268
7811

7064
3544
6462
493
1673
710
4023
23969

All

12611
8383
11083
798
3033
2661
8066
46635

Table 4: Descriptive Statistics of Quantity and Quality of CSR Disclosure

QuantityAR

QuantityWeb

Quantity
All

QualityAR*

QualityWeb*

QualityAll
*

QualityAll
Dic**

All
N

203

135

203

203

Mean
85.07
217.46
229.69
15.02
Med
68
112
131
11.86
STD
82.09
238.33
255.07
11.48
Range
559
1152
1261
58.90
Min
3
2
3
0.42
Max
562
1154
1264
59.32
China
N
50
24
50
50
Mean
30.14
109.42
82.66
9.13
Med
17
31
33.5
7.63
STD
34.24
140.12
113.09
7.52
Range
132
465
469
31.36
Min
3
2
3
0.85
Max
135
467
472
32.20
India
N
52
32
52
52
Mean
76.56
210.41
206.04
13.00
Med
61.5
98
109
11.02
STD
66.42
228.30
222.95
9.99
Range
318
876
911
39.83
Min
9
5
11
0.42
Max
327
881
922
40.25
Malaysia
N
51
29
51
51
Mean
88.76
113.24
153.16
11.43
Med
71
39
88
8.90
STD
81.60
190.53
180.49
9.86
Range
369
852
880
58.47
Min
4
5
4
0.85
Max
373
857
884
59.32
UK
N
50
50
50
50
Mean
145.10
334.28
479.38
26.69
Med
126
301.5
431.5
26.69
STD
91.52
257.48
279.41
9.57
Range
550
1113
1167
47.03
Min
12
41
97
5.08
Max
562
1154
1264
52.12
*CSR quality was computed based on a scale of '1' to '4' of the 65 items
However, some items have a scale of less than 4
The maximum score can be given for a company is 236
A score out of 236 was converted a percentage
**QualityAllDic was computed based on the binary scale of the 65 items.
This rating also refers to as unweighted scale (e.g. Mir et al. 2010)
Results are presented in percentage (to ensure comparability)

203

135

203

27.70
23.73
23.15
83.90
0.42
84.32

26.54
19.07
22.24
84.32
0.42
84.75

36.23
30.77
25.86
96.92
1.54
98.46

24
17.74
8.26
18.71
49.58
1.27
50.85

50
15.62
9.11
15.44
54.24
0.85
55.08

50
22.18
13.85
19.22
66.15
1.54
67.69

32
26.89
9.75
27.08
82.63
1.69
84.32

52
24.66
15.47
23.41
83.90
0.42
84.32

52
34.82
26.92
28.25
96.92
1.54
98.46

29
13.15
5.51
17.06
56.78
0.42
57.20

51
15.93
9.75
15.53
70.34
0.85
71.19

51
26.18
21.54
19.21
86.15
1.54
87.69

50
41.42
43.86
17.44
80.51
3.39
83.90

50
50.25
51.06
12.92
58.05
26.69
84.75

50
62.00
62.31
13.94
61.54
36.92
98.46

26

Table 5: Sentences and Quality Scores

Score
0
1
2
3
4

Description
No disclosure
General or rhetorical
Explanation is provided
Quantitative/ monetary
values
Benchmarks/ comparison
with last years figures/
standards

Examples
Nil
"We put believe that this corporation should minimize its environmental impacts ..."
"We participate in several emissions saving projects this year such as"
"Our CO2 emission this year is xxx."
"The CO2 emission is xxx this year...it is considered as x% improvement of the last
year and xxx to the standard. The achievement contributes to the saving of $xxx.

27

Table 6: Categorical Information of CSR Disclosure

Panel A: Categorical Information by All Companies
Report
Score
Mean
Med
Std.
Min
Max

Annual Reports
1
2
5.27
7.12
4.62
6.15
4.16
5.46
0.00
0.00
20.00 32.31

3
3.08
1.54
3.39
0.00
18.46

4
6.21
3.08
7.47
0.00
38.46

0
78.32
80.00
13.39
27.69
98.46

Websites
1
2
3.92
7.78
3.08
3.08
4.68
9.39
0.00
0.00
24.62 36.92

3
2.93
0.00
4.29
0.00
21.54

4
9.39
0.00
14.30
0.00
58.46

0
75.98
89.23
27.38
4.62
100.00

Annual Reports and Websites

1
2
3
4
6.37 11.44
4.32 13.05
6.15
9.23
3.08
4.62
4.67
8.98
4.29 14.80
0.00
0.00
0.00
0.00
23.08 40.00 21.54 58.46

0
64.82
70.77
25.01
4.62
98.46

Panel B: Categorical Information by Country

Reports
Score

Annual Reports
1
2
3

China
Mean
Median
Std.
Minimum
Maximum

3.6
3.1
3.0
0.0
10.8

4.2
3.8
3.2
0.0
13.8

India
Mean
Median
Std.
Minimum
Maximum

5.7
4.6
4.3
0.0
20.0

Malaysia
Mean
Median
Std.
Minimum
Maximum
UK
Mean
Median
Std.
Minimum
Maximum

Websites
1
2

All
1

4.2
0.0
7.5
0.0
27.7

2.4
0.0
4.6
0.0
15.4

3.4
0.0
7.7
0.0
27.7

88.5
100.0
19.9
33.8
100.0

4.1
3.1
3.3
0.0
15.4

7.6
4.6
7.1
0.0
27.7

3.8
1.5
4.5
0.0
15.4

6.3
3.1
8.5
0.0
35.4

78.1
86.2
18.9
32.3
98.5

4.3
3.1
5.5
0.0
23.1

7.7
3.1
10.1
0.0
36.9

2.3
0.0
3.5
0.0
12.3

8.1
0.0
15.4
0.0
58.5

77.6
90.0
30.1
4.6
100.0

6.7
6.2
5.2
0.0
21.5

11.3
9.2
9.5
0.0
40.0

4.2
3.1
4.1
0.0
15.4

11.3
3.1
15.2
0.0
58.5

66.4
73.1
27.3
4.6
98.5

80.5
81.5
12.4
27.7
98.5

4.1
1.5
5.5
0.0
24.6

3.8
0.0
6.6
0.0
26.2

1.8
0.0
3.5
0.0
12.3

2.4
0.0
7.2
0.0
29.2

88.0
96.9
19.4
24.6
100.0

8.7
7.7
5.4
0.0
23.1

7.8
4.6
7.3
0.0
33.8

3.5
1.5
4.0
0.0
15.4

5.4
1.5
8.9
0.0
41.5

74.6
80.0
18.6
15.4
98.5

66.4
66.2
9.5
46.2
93.8

5.7
5.4
3.4
0.0
13.8

15.5
15.4
8.1
0.0
36.9

5.3
4.6
4.6
0.0
21.5

23.9
23.1
13.4
0.0
55.4

49.6
47.7
18.7
6.2
95.4

5.9
5.4
3.1
0.0
13.8

19.0
18.5
6.9
4.6
36.9

5.8
4.6
4.3
0.0
21.5

29.3
30.0
11.4
9.2
56.9

39.9
40.8
13.2
6.2
63.1

2.3
1.5
2.7
0.0
10.8

3.6
1.5
4.5
0.0
21.5

86.3
87.7
9.7
58.5
98.5

1.6
0.0
2.6
0.0
9.2

6.8
6.2
4.9
0.0
18.5

3.4
1.5
3.9
0.0
18.5

4.1
1.5
5.5
0.0
20.0

79.9
80.8
13.1
44.6
98.5

7.5
6.2
4.6
0.0
16.9

6.0
4.6
5.8
0.0
32.3

2.5
1.5
3.0
0.0
12.3

3.5
1.5
5.5
0.0
33.8

4.3
3.8
3.4
0.0
13.8

11.5
10.8
5.0
1.5
23.1

4.1
3.1
3.6
0.0
15.4

13.7
13.1
8.4
1.5
38.5

28

Table 7: Descriptive Statistics of Independent Variables

BC
N
Mean
Med.
Mode
Std. D.
Variance
Skewness
Kurtosis
Range
Min
Max

203
0.48
0.5
0.5
0.14
0.02
0.20
-0.36
0.71
0.13
0.83

CO
M
203
0.27
0
0
0.45
0.20
1.04
-0.93
1
0
1

Govt
_Dic
203
0.17
0
0
0.37
0.14
1.79
1.23
1
0
1

Govt_
Shares
153
20.73
4.00
.00
28.33
802.32
1.13
-0.16
98.38
.00
98.38

IND
203
24.28
21
21
13.77
189.59
-0.57
-1.27
34
3
37

PD

UA

203
17.35
10.5
10.5
15.60
243.27
0.80
-0.86
42
1
43

203
46.98
46
45
1.70
2.89
0.37
-1.29
4.5
45
49.5

29

MAS
203
18.55
20.5
20.5
5.78
33.45
-0.51
-0.97
16
9.5
25.5

ASS
203
0.20
0
0
0.40
0.16
1.50
0.24
1
0
1

LIST
203
0.15
0
0
0.36
0.13
1.95
1.80
1
0
1

SUB
203
30.67
20.83
0
32.49
1055.44
0.74
-0.86
100
0
100

MCAP
203
14793.36
4348.90
104.03
52532.45
2759657977
10.86
134.60
686190.57
104.03
686294.60

BIG4
203
0.74
1
1
0.44
0.19
-1.13
-0.74
1
0
1

Table 8: Correlations Between Independent Variables 13

BC

BC
COM
Govt_S h
ares
Govt_Dic
IND
PD
UA
MAS
BIG4
AS S
LIS T
S UB
Ggroup
COUN
MCAP

COM Govt_ Govt_

S hares Dic

**

1
.242** -.036
.022
.260** 1
-.087 .072 1
**

-.246
-.508**
.302**
-0.075
-.302**

-.247
-.095

**

.763

-.095 .903**
-.443**.036
**

.417** -.217
0.095 .036
**
-.417**.217
.180* .015

0.136
.210** .439** -.038
0.036 .234** -.067
.351** .263** -.034
0.007 0.104 -.095
.420** .395** .045
-.009 .233** .104

IND

**

.203
-.135
-.042
.135

**

-.220
-.094
-.007

-.170*
-.096
**
-.260
*

.168

UA

MAS

BIG4

AS S

LIS T

S UB

-.398** .146*

.201** 0.012

.328** 0.033

.441**

-.501** .506** 0.055

.022
-.048 -.016

-.488** .180*
.049
-.071

.439** .234** .242** 0.058

.014
-.007 -.047
-.104

.394**

**
-.220
.183
-.855** .397** .397** 0.00
**

-.005

**

-.094

-.007

.217

**

MCAP

.097
.364**
**

.266

**

**

.208
1

-.207

-.156
-.446**0.02
-.407**
-.397** 1
.600** -1.000**.213** .405** .269** .322**
.169*
.365** 1
-.600** .417** 0.069 .257** 0.041
-.213** -.405**-.269** -.322**
.834** -.993** -.398**1
-0.0654 .263** .344** -.217** 1
0.127 0.124 .209**

-0.036
0.038
0.099
-0.038
.184**

.209
-.791** -.207**
.188** .586**
-.188** .303**
-.188** -.586**
.304** .034

-.501**
-0.0783
-.518**
-0.0899
-.699**
-.032

.493**
.210**
.463**
0.13
.520**
.114

0.014
0.046
-0.007
1
.147*
-.067

.381**
-0.06
.385**
.162*
1
-.061

0.033 -.477**
.265** -.225**
-0.06 -.444**
0.073 -0.114
-.323**-.421**
*
-.127
.165

0.127
0.124
.160*
.173*
.303**
.075

1
.162*
.290**
0.034
.382**
.086

.162*
1
.186**
0.041
-0.055
.281

**

.252**
.163*
1
-0.054
.417**
.114

** Correlation is significant at the 0.01 level (2-tailed).

* Correlation is significant at the 0.05 level (2-tailed).
Spearman correlations are presented above the diagonal. Pearson correlations are presented
below the diagonal.

13

Ggroup COUN

-.483** .421** -0.08

**

PD

The table also includes variables that have been controlled in the sample selection process

30

-.139

-.260

.373**
.294**
.283**
.022
-.013
1

Table 9: Regression of Quality and Quantity on Explanatory Variables

Panel A:
Equation (x) CSR= o + 1BC + 2 COM + 3Govt+4IND + 5M AS+ 6BIG4 + 7ASS+ 8LIST+9SUB+ 10M CAP+

(Constant)

QualityAR

QualityWeb

QualityAll

QuantityAR

QuantityWeb

QuantityAll

t
8.848

t
5.612

t
7.661

Sig.
.000

t
2.342

Sig.
.020

t
2.421

Sig.
.017

t
3.798

.247
0.000***
0.025**
0.000***
.422
.110
0.000***
0.004***
.395
.185

.913
3.352
-.248
-4.043
2.566
3.015
1.025
1.927
1.438
-.690
.226

.362
0.001***
.804
0.000***
0.011***
0.003***
.306
0.055*
.152
.491

-.820
2.999
1.283
-.268
.341
.056
6.775
1.401
2.330
1.106
.426

.414
-.491
0.003***4.677
.202
1.015
.789
-2.208
.733
1.615
.955
1.535
0.000***8.047
.164
2.203
0.021** 2.659
.271
1.023
.570

34.206
0.000

67.924
0.000

Sig.
.000

Sig.
.000

(+/-) -1.812 0.071* -.195

.846
-1.160
(+/-) 3.153 0.002** 3.366
0.001*** 9.829
(+/-) 2.426 0.016** .675
.501
2.267
(+/-) -5.050 0.000*** -2.123 0.036** -4.046
(+/-) -.361
.718
.804
.423
.805
(+) 1.684 0.094* .690
.491
1.604
(+) 1.865 0.064* 9.256
0.000*** 5.251
(+) 1.163 .246
2.403
0.018** 2.933
(+) .108
.914
.728
.468
.852
(+) -1.059 .291
1.360
.176
1.329
.359
.615
.678
Adjusted R2
F29.320
54.530
86.161
Sig
0.000
0.000
0.000
0.000
*Correlation is significant at the 0.1 level (2-tailed).
**Correlation is significant at the 0.05 level (2-tailed).
***Correlation is significant at the 0.01 level (2-tailed).

BC
COM
Govt
IND
M AS
BIG4
ASS
LIST
SUB
M CAP

15.719
0.000

Multicolearity has been checked using VIF. We found no correlation above 0.80.

31

Sig.
.000
.624
0.000***
.312
0.028**
.108
.126
0.000***
0.029**
0.008***
.307

Panel B: Regression Models by Country

Regression
Equation (x) CSR= o + 1BC + 2 COM + 3Govt+4BIG4 + 5ASS+ 6LIST + 7SUB+ 8M CAP+
China
QualityAR
QualityWeb
QualityAll
QuantityAR
t
Sig.
t
Sig.
t
Sig.
t
Sig.
(Constant)
BC
COM
Govt
BIG4
ASS
LIST
SUB
M CAP

1.366
(+) -.441
(+) 1.112
(+/-) .680
(+) .968
(+) .911
(+) 1.683
(+) -.198
(+) -1.261
.025
Adjusted R2
F-statistic
1.157
Sig
.348

.179
.662
.272
.500
.339
.368
.100
.844
.214

-1.340
1.958
1.532
.214
.831
3.774
1.227
.139
1.598
.633

.200
0.069*
.146
.833
.419
0.001***
.239
.891
.131

.632
.166
0.021**
.246
.115
0.000***
0.025**
.638
.170

.527
.428
.700
.916
.287
.732
.407
.493
.619

-1.263
1.604
1.941
2.012
1.813
4.614
1.704
1.006
1.587
0.631

.726
.569
.456
0.019**
.531
0.018**
.489
.716
.410

QuantityWeb
t
Sig.

QuantityAll
t

(Constant)

Sig.

.214
.116
0.059*
0.051*
0.077*
0.000***
0.09*
.320
.120

Equation (x) CSR= o + 1BC + 2 COM + 3Govt+4BIG4 + 5ASS+ 6LIST + 7SUB+ 8M CAP+
India
QualityAR
QualityWeb
QualityAll
QuantityAR
t
Sig.
t
Sig.
t
Sig.
t
Sig.

Adjusted R
F-statistic
Sig

.686
.701

-.356
.582
.765
2.612
.641
2.651
.710
.370
.847
0.35

11.47
0.000

(+)
(+)
(+/-)
(+)
(+)
(+)
(+)
(+)

10.434
.000

-.638
.801
.387
.106
1.079
.345
.838
.692
-.501
-.054

QuantityAll
t

5.857
0.000

BC
COM
Govt
BIG4
ASS
LIST
SUB
M CAP

5.963
.002

-.483
1.411
2.400
1.176
1.610
4.134
2.325
.474
1.396
.606

QuantityWeb
t
Sig.

Sig.

3.501

.001

1.749

.094

2.944

.005

-.029

.977

2.168

.041

2.144

.038

-2.079
1.865
1.045
-1.068
-.595
1.017
-.568
2.891
.232

0.044**
0.069*
.302
.291
.555
.315
.573
0.006***

-.737
.295
-1.069
1.825
7.246
2.247
-1.022
-.223
.789

.469
.771
.296
0.081*
0.000***
0.035**
.317
.826

-1.394
1.164
.610
.136
7.114
3.255
-.638
1.632
.718

.171
.251
.545
.892
0.000***
0.002***
.527
.110

-2.140
2.327
-1.742
.048
-1.202
2.335
-2.127
3.605
.312

0.038**
0.025**
0.089*
.962
.236
0.024**
0.039**
0.001***

-1.828
1.282
.143
2.211
6.183
.351
-1.219
.052
0.77

0.08*
.213
.888
0.037**
0.000***
.729
.235
.959

-.864
2.641
-.172
.995
6.237
2.410
-1.468
1.871
0.721

.392
0.011***
.864
.325
0.000***
0.020**
.149
0.068*

2.924
.011

15.463
.000

13.972
0

17.452
0.000

Equation (x) CSR= o + 1BC + 2 COM + 3Govt+4BIG4 + 5ASS+ 6LIST + 7SUB+ 8M CAP+
Malaysia
QualityAR
QualityWeb
QualityAll
QuantityAR
t
Sig.
t
Sig.
t
Sig.
t
Sig.

QuantityWeb
t
Sig.

QuantityAll
t

(Constant)

1.371

.178

1.743

.097

1.965

.056

.562

.577

.907

.375

1.054

.298

BC
(+)
COM
(+)
Govt
(+/-)
BIG4
(+)
ASS
(+)
LIST
(+)
SUB
(+)
M CAP
(+)
Adjusted R2

-.661
.224
1.720
.942
.602
5.991
-.524
1.921
.488

.512
.824
0.093*
.352
.551
0.000***
.603
0.061*

-1.276
-.138
.650
-.054
3.396
2.400
.025
.298
.416

.217
.891
.523
.957
0.003***
0.026**
.980
.769

-1.355
.069
1.744
.518
4.623
4.934
-.332
1.723
.529

.183
.946
0.088*
.607
0.000***
0.000***
.741
0.092*

-.688
.284
2.123
1.313
.659
3.529
-.504
1.611
.275

.495
.778
0.04**
.196
.514
0.001***
.617
.115

-1.389
.801
.155
.362
.592
.267
.670
.037
-0.048

.180
.432
.878
.721
.561
.792
.511
.971

-1.855
.499
1.481
.823
2.130
2.608
.286
1.120
0.275

0.071*
.620
.146
.415
0.039**
0.013*
.776
.269

F-statistic
Sig

.000

6.955

17.249
.000

3.497
.011

3.885
.002

3.367
.005

0.84

3.369

0.005

Equation (x) CSR= o + 1BC + 2 COM + 3ASS+4LIST + 5SUB+ 6M CAP +

UK
QualityAR
QualityWeb
QualityAll
t
Sig.
t
Sig.
t
Sig.

QuantityAR
t
Sig.

QuantityWeb
t
Sig.

QuantityAll
t
Sig.

(Constant)

3.128

.003

1.244

.221

2.898

.006

1.441

.157

-1.518

.137

-.889

.379

BC
(+/-)
COM
(+/-)
ASS
(+)
LIST
(+)
SUB
(+)
M CAP
(+)
Adjusted R2

-1.670
1.218
2.236
.066
1.067
-1.943
.083

.102
.230
0.031**
.948
.292
0.059*

.628
.093
3.797
1.011
.227
.055
.269

.533
.926
0.000***
.318
.821
.957

.151
.476
4.200
1.381
.796
-.464
.304

.880
.637
0.000***
.175
.431
.645

-1.300
1.537
1.413
1.128
1.915
-1.110
.084

.201
.132
.165
.266
0.062*
.273

1.421
.097
2.262
.474
2.186
1.248
0.308

.163
.923
0.029**
.638
0.034**
.219

.851
.695
2.718
.895
2.841
.760
0.358

.400
.491
0.009***
.376
0.007***
.452

8.028
.000

Sig.

F-statistic
1.630
3.571
Sig
.154
.004
*Correlation is significant at the 0.1 level (2-tailed).
**Correlation is significant at the 0.05 level (2-tailed).
***Correlation is significant at the 0.01 level (2-tailed).

4.055
.002

1.639
.151

32

4.115
0.000

4.91
0.000

Table 10: Regression Model with Interaction Variables

Panel A
Equation (x) CSR= o + 1Big4 + 2 Com+ 3Ass+-4 Bd+ 5Lis+ 6 Sub+7 Govt+ 8Ind+9Size+ 10Com*Ind+

(Constant)
COM
BC
Govt
IND
IND*COM
BIG4
ASS
LIST
SUB
M CAP
Adjusted R2
F-statistic
Sig

(+/-)
(+/-)
(+/-)
(+/-)
(+/-)
(+)
(+)
(+)
(+)
(+)

QualityAR

QualityWeb

QualityAll

QuantityAR

QuantityWeb

QuantityAll

t
6.206
1.239
-1.801
2.064
-3.041
.846
2.404
1.364
1.510
.155
-2.093
.390
13.909
0.000

t
2.863
.067
-.216
.054
-3.066
2.578
1.048
8.605
1.982
.573
.480
.626
23.400
0.000

t
5.620
1.066
-1.085
1.994
-4.323
2.654
2.604
9.362
2.968
.866
.075
.699
47.994
0.000

t
2.046
1.471
.802
.641
-1.022
.041
1.981
.584
1.271
.869
-1.398
.210
6.373
0.000

t
1.377
1.273
-.752
.944
-.532
.182
.132
5.999
1.272
1.766
.391
.416
10.561
0.000

t
2.348
2.211
-.448
1.111
-1.349
.272
1.711
7.578
1.982
2.105
.170
.576
28.464
0.000

S ig.
.000
.217
0.073*
0.040**
0.003***
.399
0.017**
.174
.133
.877
0.038**

S ig.
.005
.947
.829
.957
0.003***
0.011**
.297
0.000***
0.05**
.568
.632

S ig.
.000
.288
.279
0.048**
0.000***
0.009***
0.001***
0.000***
0.003***
.388
.941

S ig.
.042
.143
.423
.522
.308
.967
0.049**
.560
.205
.386
.164

S ig.
.171
.205
.453
.347
.596
.855
.895
0.000***
.206
0.080*
.697

S ig.
.020
0.028**
.655
.268
.179
.786
0.089*
0.000***
0.049**
0.037**
.865

*Correlation is significant at the 0.1 level (2-tailed).

**Correlation is significant at the 0.05 level (2-tailed).
***Correlation is significant at the 0.01 level (2-tailed).
Data was entered using force entry regression procedures (all variables were assumed to have similar degree of importance)
We conducted correlation tests between all the independent variables before performing the regression test. No correlation
above 0.8 was found.
Multicollinearity was checked again using the VIF. The VIF for MAS was relatively high. As a result, MAS was removed
from the test.
The VIF for IND and IND*COM exceeded 10.00. We performed sensitivity analyses to check for the robustness of the
results. Regression tests were conducted to the data which was grouped into two: COM=yes; COM=no.
No significant change in result was found. Thus, our results are robust

Panel B
Equation (x) CSR= o + 1Big4 + 2 Com+ 3Ass+-4 Bd+ 5Lis+ 6 Sub+7 Govt+ 8Ind+9Size+ 10Com*Govt+

(Constant)
COM
BC
Govt
IND
IND*Govt
BIG4
ASS
LIST
SUB
M CAP
Adjusted R2
F-statistic
Sig

(+/-)
(+/-)
(+/-)
(+/-)
(+/-)
(+)
(+)
(+)
(+)
(+)

QualityAR

QualityWeb

QualityAll

QuantityAR

QuantityWeb

QuantityAll

t
5.608
3.040
-1.712
1.328
-.711
-.811
2.441
1.583
1.439
.165
-1.892
.390
13.899
0.000

t
2.418
2.544
-.272
-.878
-1.360
1.028
.114
8.943
1.800
.407
.914
.609
21.868
0.000

t
4.737
4.620
-1.017
.437
.134
-1.349
2.066
9.678
2.550
.765
.698
.688
45.622
0.000

t
2.171
2.197
.761
-.315
-1.127
.492
1.770
.551
1.253
.847
-1.458
.211
6.405
0.000

t
1.199
2.060
-.746
.288
-.136
-.057
.122
6.130
1.243
1.749
.449
.416
10.556
0.000

t
2.271
3.673
-.449
.190
-.822
.100
1.588
7.676
1.955
2.091
.234
.576
28.448
0.000

S ig.
.000
0.003**
0.089*
.186
.478
.418
0.016**
.115
.152
.869
0.060*

S ig.
.017
0.012**
.786
.382
.176
.306
.909
0.000***
0.074*
.684
.363

S ig.
.000
0.000***
.310
.662
.894
.179
0.040**
0.000***
0.012**
.445
.486

S ig.
.031
0.029**
.447
.753
.261
.623
0.078*
.582
.212
.398
.146

S ig.
.233
0.042**
.457
.774
.892
.955
.903
0.000***
.216
0.083*
.654

S ig.
.024
0.000***
.654
.849
.412
.921
.114
0.000***
0.052*
0.038**
.815

*Correlation is significant at the 0.1 level (2-tailed).

**Correlation is significant at the 0.05 level (2-tailed).
***Correlation is significant at the 0.01 level (2-tailed).
Data was entered using force entry regression procedures (all variables were assumed to have similar degree of importance)
We conducted correlation tests between all the independent variables before performing the regression test. No correlation
above 0.8 was found. Multicollinearity was checked again using the VIF. The VIF for MAS was relatively high. As a result,
MAS was removed from the test. The VIF for IND and IND*Govt exceeded 10.00.
For the robustness check, regression analyses were conducted to the data which was grouped into two: Govt=yes; Govt=no.
We found supports for Hypothesis 3b.

33

Appendix 1: Hofstedes Cultural Taxonomies

Country
UK
India
Malaysia
China

Power Distance
Score
Rank
35
43
77
10.5
104
1
68
15.5

Individualism
Score
Rank
89
3
48
21
26
36
25
37

Sources: Hofstede, 2001

34

Uncertainty Avoidance
Score
Rank
35
47.5
40
45
36
46
29
49.5

Masculinity
Score
66
56
50
57

Rank
9.5
20.5
25.5
18.5