The impact of corporate social responsibility disclosure quality on financial performance: with special reference to the listed companies in Sri Lanka

Abstract

The purpose of this study is to investigate the effect of Corporate Social Responsibility Disclosure Quality on Financial Performance. In parallel, the study focuses on several objectives; to assess the level of adoption of Corporate Social Responsibility disclosure quality in a different industry of the listed companies in Sri Lanka, to examine the relationship between Corporate Social Responsibility Disclosure Quality and the Financial Performance of the listed companies in Sri Lanka, to examine the impact of Corporate Social Responsibility disclosure quality on the Financial Performance of the listed companies in Sri Lanka. The study applied the deductive approach, and the population of the study has 294 companies representing 20 industry groups in the Colombo Stock Exchange (CSE) as at 30th September 2022. The Global Industry Classification Standard (GICS) structure consists of 11 sectors, 24 Industry groups, 69 Industries and 158 sub-industries in the Colombo Stock Exchange. The study selected 30 companies representing two sectors: The Industrial and Material sectors. The data were gathered from the annual reports of selected 30 companies from the Colombo Stock Exchange Website. The is a quantitative study, and the data are analyzed using descriptive statistical measures, correlation and regression analysis. The study attempted to examine the impact of CSR disclosures on financial performance. Hence the results of the study can be used to make different types of business decision-makers such as stakeholders, managers, regulators of the capital markets, and policymakers. Further, these findings can be used to develop a framework for corporate social responsibility reporting disclosures and setting financial reporting standards.