COVID-19 and CSR disclosure: evidence from New Zealand
Stakeholders' uncertainty about firms' value drives their urge to get information, as well as managerial disclosure choices. In this study, the authors examine whether and how an important source of uncertainty – the recent COVID-19 pandemic's effect on corporate social responsibility...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2022-09-01
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| Series: | China Accounting and Finance Review |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/CAFR-03-2022-0017/full/html |
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| author | Stephen Bahadar Rashid Zaman |
| author_facet | Stephen Bahadar Rashid Zaman |
| author_sort | Stephen Bahadar |
| collection | DOAJ |
| description | Stakeholders' uncertainty about firms' value drives their urge to get information, as well as managerial disclosure choices. In this study, the authors examine whether and how an important source of uncertainty – the recent COVID-19 pandemic's effect on corporate social responsibility (CSR) disclosure – is beyond managerial and stakeholders' control.
The authors develop a novel construct for daily CSR disclosure by employing computer-aided text analysis (CATA) on the press releases issued by 125 New Zealand Stock Exchange (NZX) listed from 28 February 2020 to 31 December 2020. To capture COVID-19 intensity, the authors use the growth rate of the population-adjusted cumulative sum of confirmed cases in New Zealand on a specific day. To examine the association between the COVID-19 outbreak and companies' CSR disclosure, the authors employed ordinary least squares (OLS) regression by clustering standard error at the firm level.
The authors find a one standard deviation increase in the COVID-19 outbreak leads to a 28% increase in such disclosures. These results remained robust to a series of sensitivity tests and continue to hold after accounting for potential endogeneity concerns. In the channel analysis, the study demonstrates that the positive relationship between COVID-19 and CSR disclosure is more pronounced in the presence of a well-structured board (i.e. a large, more independent board and with a higher proportion of women on it). In further analysis, the authors find the documented relationship varies over the pandemic's life cycle and is moderated by government stringency response, peer CSR pressure and media coverage.
This paper is the first study that contributes to the scant literature examining the impact of the COVID-19 outbreak on CSR disclosure. Prior research either investigates the relationship of the CSR-stock return during the COVID-19 market crisis or examines the relationship between corporate characteristics including the quality of financial information and the reactions of stock returns during COVID-19. The authors extend such studies by providing empirical evidence that managers respond to COVID-19 by increasing CSR disclosure. |
| first_indexed | 2024-03-12T00:42:28Z |
| format | Article |
| id | doaj.art-b513f5a1866e4a84b77b8ac9212f5347 |
| institution | Directory Open Access Journal |
| issn | 2307-3055 |
| language | English |
| last_indexed | 2024-03-12T00:42:28Z |
| publishDate | 2022-09-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | China Accounting and Finance Review |
| spelling | doaj.art-b513f5a1866e4a84b77b8ac9212f53472023-09-15T03:33:35ZengEmerald PublishingChina Accounting and Finance Review2307-30552022-09-0124339141510.1108/CAFR-03-2022-0017COVID-19 and CSR disclosure: evidence from New ZealandStephen Bahadar0https://orcid.org/0000-0003-0408-4339Rashid Zaman1https://orcid.org/0000-0003-3111-9437Auckland University of TechnologyEdith Cowan UniversityStakeholders' uncertainty about firms' value drives their urge to get information, as well as managerial disclosure choices. In this study, the authors examine whether and how an important source of uncertainty – the recent COVID-19 pandemic's effect on corporate social responsibility (CSR) disclosure – is beyond managerial and stakeholders' control. The authors develop a novel construct for daily CSR disclosure by employing computer-aided text analysis (CATA) on the press releases issued by 125 New Zealand Stock Exchange (NZX) listed from 28 February 2020 to 31 December 2020. To capture COVID-19 intensity, the authors use the growth rate of the population-adjusted cumulative sum of confirmed cases in New Zealand on a specific day. To examine the association between the COVID-19 outbreak and companies' CSR disclosure, the authors employed ordinary least squares (OLS) regression by clustering standard error at the firm level. The authors find a one standard deviation increase in the COVID-19 outbreak leads to a 28% increase in such disclosures. These results remained robust to a series of sensitivity tests and continue to hold after accounting for potential endogeneity concerns. In the channel analysis, the study demonstrates that the positive relationship between COVID-19 and CSR disclosure is more pronounced in the presence of a well-structured board (i.e. a large, more independent board and with a higher proportion of women on it). In further analysis, the authors find the documented relationship varies over the pandemic's life cycle and is moderated by government stringency response, peer CSR pressure and media coverage. This paper is the first study that contributes to the scant literature examining the impact of the COVID-19 outbreak on CSR disclosure. Prior research either investigates the relationship of the CSR-stock return during the COVID-19 market crisis or examines the relationship between corporate characteristics including the quality of financial information and the reactions of stock returns during COVID-19. The authors extend such studies by providing empirical evidence that managers respond to COVID-19 by increasing CSR disclosure.https://www.emerald.com/insight/content/doi/10.1108/CAFR-03-2022-0017/full/htmlcsr disclosurenovel coronaviruscovid-19sars-cov-2information uncertaintystakeholder-agency theorycorporate governancemedia coverage |
| spellingShingle | Stephen Bahadar Rashid Zaman COVID-19 and CSR disclosure: evidence from New Zealand China Accounting and Finance Review csr disclosure novel coronavirus covid-19 sars-cov-2 information uncertainty stakeholder-agency theory corporate governance media coverage |
| title | COVID-19 and CSR disclosure: evidence from New Zealand |
| title_full | COVID-19 and CSR disclosure: evidence from New Zealand |
| title_fullStr | COVID-19 and CSR disclosure: evidence from New Zealand |
| title_full_unstemmed | COVID-19 and CSR disclosure: evidence from New Zealand |
| title_short | COVID-19 and CSR disclosure: evidence from New Zealand |
| title_sort | covid 19 and csr disclosure evidence from new zealand |
| topic | csr disclosure novel coronavirus covid-19 sars-cov-2 information uncertainty stakeholder-agency theory corporate governance media coverage |
| url | https://www.emerald.com/insight/content/doi/10.1108/CAFR-03-2022-0017/full/html |
| work_keys_str_mv | AT stephenbahadar covid19andcsrdisclosureevidencefromnewzealand AT rashidzaman covid19andcsrdisclosureevidencefromnewzealand |