The aim of the research was to determine the efficiency of investing in companies that report on their corporate social responsibility (CSR) in developing markets. Companies that won the Asia Sustainability Reporting Awards 2020 were chosen for the study. We evaluate the correlation utilizing data from 36 firms from year observations of 2018 to 2020, using modified OLS estimation and regression analysis with modified panel data for heteroskedasticity and/or autocorrelation. In the emerging market, the sample period under examination is quite recent. Research findings show that CSR reporting has a significant negative effect on the company’s investment efficiency (IE) and that CSR reporting influences IE in the overinvestment scenario. The findings from this paper provide several implications for related parties and managers to enhance CSR disclosure and IE. They also contribute significantly to the existing literature about the relationship between CSR and IE when providing evidence from the ASEAN context.


Aerts, W., Cormier, D., & Magnan, M. (2008). Corporate environmental disclosure, financial markets and the media: An international perspective. Ecological Economics, 64(3), 643-659. doi:10.1016/j.ecolecon.2007.04.012

Benlemlih, M., & Bitar, M. (2016). Corporate Social Responsibility and Investment Efficiency. Journal of Business Ethics, 148(3), 647-671. doi:10.1007/s10551-016-3020-2

Biddle, G. C., Hilary, G., & Verdi, R. S. (2009). How does financial reporting quality relate to investment efficiency? Journal of accounting and economics, 48(2-3), 112-131. doi:10.1016/j.jacceco.2009.09.001

Broadstock, D. C., Matousek, R., Meyer, M., & Tzeremes, N. G. (2020). Does corporate social responsibility impact firms’ innovation capacity? The indirect link between environmental & social governance implementation and innovation performance. Journal of Business Research, 119, 99-110. doi:10.1016/j.jbusres.2019.07.014

Buallay, A., Kukreja, G., Aldhaen, E., Al Mubarak, M., & Hamdan, A. M. (2020). Corporate social responsibility disclosure and firms’ performance in Mediterranean countries: a stakeholders’ perspective. EuroMed Journal of Business, 15(3), 361-375. doi:10.1108/emjb-05-2019-0066

Deepa Gokulsing, R. (2011). CSR matters in the development of Mauritius. Social Responsibility Journal, 7(2), 218-233. doi:10.1108/17471111111141503

Dhaliwal, D. S., Li, O. Z., Tsang, A., & Yang, Y. G. (2009). Voluntary Non-Financial Disclosure and the Cost of Equity Capital: The Case of Corporate Social Responsibility Reporting. SSRN Electronic Journal. doi:10.2139/ ssrn.1343453

Elberry, N., & Hussainey, K. (2020). Does corporate investment efficiency affect corporate disclosure practices? Journal of Applied Accounting Research, 21(2), 309-327. doi:10.1108/jaar-03-2019-0045

Erawati, N. M. A., Sutrisno, T., Hariadi, B., & Saraswati, E. (2021). The Role of Corporate Social Responsibility in the Investment Efficiency: Is It Important? Journal of Asian Finance Economics and Business, 8(1), 169- 178. doi:10.13106/jafeb.2021.vol8.no1.169

GRI. (2016). Full set of GRI Standards 2021. Retrieved from https://www.globalreporting. org/how-to-use-the-gri-standards/gristandards- english-language/

Ho, K.-C., Li, H.-M., & Gong, Y. (2022). How does corporate social performance affect investment inefficiency? An empirical study of China market. Borsa Istanbul Review, 22(3), 515-524. doi:10.1016/j.bir.2021.06.016

Huang, X. B., & Watson, L. (2015). Corporate social responsibility research in accounting. Journal of Accounting Literature, 34(1), 1-16. doi:10.1016/j.acclit.2015.03.001

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. doi:10.1016/0304-405x(76)90026-x

Khediri, K. B. (2021). CSR and investment efficiency in Western European countries. Corporate Social Responsibility and Environmental Management, 28(6), 1769-1784. doi:10.1002/csr.2151

Khuong, N. V., & Anh, L. H. T. (2022a). The mediating mechanism of earnings management on the relationship between life cycle and financial reporting quality: Finding from MRA and fsQCA. Business Strategy & Development. doi:10.1002/bsd2.205

Khuong, N. V., & Anh, L. H. T. (2022b). The nexus between corporate social responsibility and firm value: the moderating role of life-cycle stages. Social Responsibility Journal. doi:10.1108/srj-09-2021-0370

Khuong, N. V., Anh, L. H. T., Quyen, P. N., & Thao, N. T. T. (2022). Agency cost: A missing link between female on board and firm performance. Business Strategy & Development. doi:10.1002/bsd2.199

Khuong, N. V., Anh, L. H. T., & Van, N. T. H. (2022). Firm life cycle and earnings management: The moderating role of state ownership. Cogent Economics & Finance, 10(1). doi:10.1080/23322039.2022.2085260

Khuong, N. V., Rahman, A. A. A., Meero, A., Anh, L. H. T., Liem, N. T., Thuy, C. T. M., & Ly, H. T. N. (2022). The Impact of Corporate Social Responsibility Disclosure and Accounting Comparability on Earnings Persistence. Sustainability, 14(5). doi:10.3390/ su14052752

Li, K.-F., & Liao, Y.-P. (2014). Directors’ and officers’ liability insurance and investment efficiency: Evidence from Taiwan. Pacific-Basin Finance Journal, 29, 18-34. doi:10.1016/j.pacfin.2014.03.001

Lin, Y.-E., Li, Y.-W., Cheng, T. Y., & Lam, K. (2021). Corporate social responsibility and investment efficiency: Does business strategy matter? International Review of Financial Analysis, 73. doi:10.1016/j. irfa.2020.101585

Liu, L., & Tian, G. G. (2019). Mandatory CSR disclosure, monitoring and investment efficiency: evidence from China. Accounting & Finance, 61(1), 595-644. doi:10.1111/ acfi.12588

Samet, M., & Jarboui, A. (2017). How does corporate social responsibility contribute to investment efficiency? Journal of Multinational Financial Management, 40, 33-46. doi:10.1016/j.mulfin.2017.05.007

Thuy, H. X., Khuong, N. V., Anh, L. H. T., & Quyen, P. N. (2022). Effect of corporate governance on corporate social responsibility in Vietnam: state-ownership as the moderating role. Journal of Financial Reporting and Accounting. doi:10.1108/jfra-10-2021-0367

Yang, S.-L. (2015). Corporate social responsibility and an enterprise’s operational efficiency: considering competitor’s strategies and the perspectives of long-term engagement. Quality & Quantity, 50(6), 2553-2569. doi:10.1007/s11135-015-0276-z

Zamir, F., Shailer, G., & Saeed, A. (2020). Do corporate social responsibility disclosures influence investment efficiency in the emerging markets of Asia? International Journal of Managerial Finance, 18(1), 28- 48. doi:10.1108/ijmf-02-2020-0084

Zhao, T. (2021). Board network, investment efficiency, and the mediating role of CSR: Evidence from China. International Review of Economics & Finance, 76, 897-919. doi:10.1016/j.iref.2021.08.005

Zhong, M., & Gao, L. (2017). Does corporate social responsibility disclosure improve firm investment efficiency? Review of Accounting and Finance, 16(3), 348-365. doi:10.1108/ raf-06-2016-0095



To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.