Corporate Social Responsibility Disclosure and Investment Efficiency

Abstract

The aim of this study was to investigate the effect of corporate social responsibility disclosure on the investment efficiency. The evidence reveals that corporate social responsibility disclosure decreases investment inefficiency and consequently increases investment efficiency. Content analysis method was used to measure levels of corporate social responsibility disclosure. A sample of 90 firms listed in Tehran Stock Exchange during the years 2010 to 2015 were selected. Multiple regression models based on panel data techniques were used to test the research hypotheses. The independent variable in this study is corporate social responsibility disclosure and Investment efficiency is dependent variable. The findings indicate that social responsibility disclosure will improve investment efficiency in firms. This result is consistent with the expectation that high CSR firms enjoy low information asymmetry and high stakeholder solidarity (stakeholder theory). Taken together, the findings highlight the important role that CSR plays in shaping firms’ investment behavior and efficiency.