Nature and Determinants of CSR Disclosure: Experience of the Jordanian Public Shareholding Companies

Abstract

Recently, much attention has been dedicated by researchers to the study of Corporate Social Responsibility (CSR) disclosures among corporations. However, most of the studies so far have been conducted in developed countries, with only a few being undertaken in developing countries. This study aims to investigate the extent to which CSR is disclosed in the annual reports of the Jordanian public shareholding companies. The study also examines whether the level of disclosure is influenced by a group of factors, including: age of the reporting company, sector, ownership structure, and market capitalization. In order to achieve its objectives, a research index with 41 items was designed for the purpose of data collection. In total, the annual reports and accounts and stand-alone CSR report of 234 public shareholding companies listed in Amman Stock Exchange (ASE) for the fiscal year 2011 were analyzed. The findings of this study indicate that practice of CSR reporting is improving in Jordan (where percentage of disclosure reached 19% of the investigated items in comparison with 13% in 2004, see Suwaidan et al., 2004). In terms of the CSR dimensions, the results revealed that environment is still the weakest topic being disclosed (10.2%) while economic aspects are on the top of information disclosed (62.5%). One of the key results exposed in the current study is the weak engagement of the Jordanian largest businesses with stakeholders. This is evidenced by low attention being given to identify different groups of stakeholders, identifying their concerns, and presenting real responsiveness to these concerns. The study suggests that associations are exist between age of the reporting company and market capitalization with CSR disclosure (aggregated dimensions), while less associations exist between sector (industry type) and ownership structure with CSR reporting. This study concludes with some practical recommendations aiming at improving CSR practice and reporting practice within the Jordanian business environment.

Keywords: CSR; Jordan; Public Shareholding Companies; Disclosure Practices; Corporate Characteristics; Disclosure Index.