Volume 27 Issue 3 Article 2 September 2025 Corporate Social Responsibility Disclosure and Financial Corporate Social Responsibility Disclosure and Financial Performance: Empirical Evidence From Vietnam Performance: Empirical Evidence From Vietnam Nguyen T. Tran Academy of Policy and Development, Faculty of Digital Economics, Hanoi, Vietnam Nhung T. Le Academy of Policy and Development, Faculty of Economics, Hanoi, Vietnam Tung D. Nguyen Academy of Policy and Development, Faculty of Finance and Banking, Hanoi, Vietnam, tung.nguyen@apd.edu.vn Follow this and additional works at: https://www.ebrjournal.net/home Part of the Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons, and the Finance Commons Recommended Citation Recommended Citation Tran, N., Le, N., & Nguyen, T. (2025). Corporate Social Responsibility Disclosure and Financial Performance: Empirical Evidence From Vietnam. Economic and Business Review, 27(3), 141-159. https://doi.org/10.15458/2335-4216.1357 This Original Article is brought to you for free and open access by Economic and Business Review. It has been accepted for inclusion in Economic and Business Review by an authorized editor of Economic and Business Review. ORIGINAL ARTICLE Corporate Social Responsibility Disclosure and Financial Performance: Empirical Evidence From Vietnam NguyenT.Tran a ,NhungT.Le b ,TungD.Nguyen c, * a Academy of Policy and Development, Faculty of Digital Economics, Hanoi, Vietnam b Academy of Policy and Development, Faculty of Economics, Hanoi, Vietnam c Academy of Policy and Development, Faculty of Finance and Banking, Hanoi, Vietnam Abstract This study examines the relationship between corporate social responsibility (CSR) disclosure and rm performance, with particular attention to CSR’s role as a mitigating mechanism during periods of economic crisis, notably the COVID-19 pandemic. Utilizing a unique hand-collected dataset comprising CSR disclosures from Vietnamese publicly listed rms in the VNR500 index between 2014 and 2021, the analysis employs both accounting-based (return on equity) and market-based (Tobin’s Q) performance indicators. The empirical ndings indicate a positive association between CSR disclosure and rm performance across both measures. Disaggregated analysis reveals that governance-related disclosures signicantly enhance market valuation, whereas the presence of a well-articulated CSR vision and strategic orientation correlates positively with accounting protability. These results suggest that robust governance frameworks, environmental stewardship, and socially responsible product strategies contribute to superior rm outcomes. Moreover, the study provides empirical support for the conceptualization of CSR as an insurancelike mechanism that mitigates the adverse effects of external shocks—such as the COVID-19 pandemic—by preserving rm value and protecting shareholder interests. Keywords: CSR disclosure, Financial performance, COVID-19, Vietnam JEL classication: M14, G32 1 Introduction C orporate social responsibility (CSR) has increas- ingly been acknowledged as a strategic imper- ative in the global business environment. In recent years, CSR performance metrics have been system- atically integrated into corporate annual reports, alongside a growing trend of rms issuing dedicated CSR or sustainability reports. The institutionalization of CSR practices accelerated notably during the 2000s, as evidenced by the substantial rise in CSR report- ing rates. For instance, while in the late 2000s only around one-third of the world’s 250 largest corpora- tions by revenue published CSR reports, this gure has consistently exceeded 90% since the early 2010s (KPMG, 2020). The elevated importance of CSR as a strategic priority has intensied attention toward CSR disclosure practices, contributing to the emergence of various CSR-related directives and a proliferation of nonnancial reporting regulations across multiple ju- risdictions over the past decade (Gupta & Das, 2022). CSR disclosures are generally categorized as either mandatory—where reporting is legally required—or voluntary, where the scope, depth, and quality of disclosures can vary substantially among rms. Additionally, signicant differences exist across national CSR disclosure frameworks, with jurisdictions diverging in the specic types of information mandated or recommended for inclusion in sustainability reports. The value relevance of CSR Received 13 December 2024; accepted 3 June 2025. Available online 10 September 2025 * Corresponding author. E-mail address: tung.nguyen@apd.edu.vn (T. D. Nguyen). https://doi.org/10.15458/2335-4216.1357 2335-4216/© 2025 School of Economics and Business University of Ljubljana. This is an open access article under the CC BY license (http://creativecommons.org/ licenses/by/4.0/). 142 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 disclosure has attracted growing scholarly interest in recent years. Nevertheless, empirical ndings on the relationship between CSR disclosure and rm value remain mixed. Some studies report a positive, value-enhancing effect of CSR disclosure (Khan et al., 2021; Xu et al., 2020), while others nd either negative or insignicant relationships. Moreover, the majority of existing research has concentrated on developed economies, with limited exploration in developing and emerging markets. This is particularly notable given that CSR practices and investment patterns in emerging markets often differ considerably from those in Western countries (Gupta & Das, 2022). Furthermore, although there is substantial evidence supporting the protective role of CSR activities for rm value during periods of crisis (Flammer, 2015; Godfrey, 2005; Godfrey et al., 2009), the specic role of CSR disclosure as a protective mechanism remains underexplored. Addressing these gaps, the present study seeks to examine the relationship between CSR disclosure and nancial performance in an emerging market context. Specically, it investigates the extent of CSR disclosure among publicly listed companies in Vietnam and evaluates the potential role of CSR disclosure as a protective mechanism during periods of crisis, focusing on the COVID-19 pandemic. The inconclusive empirical evidence regarding the relationship between CSR disclosure and rm value can be interpreted through various theoretical lenses. Signaling theory (Akerlof, 1970) and stakeholder theory (Freeman, 1984) posit a positive association, suggesting that the disclosure of credible CSR infor- mation mitigates information asymmetries between rms and their stakeholders, enhances internal gov- ernance mechanisms, reduces the cost of capital, and improves expected future cash ows. In contrast, agency theory (Jensen & Meckling, 1976) predicts a value-destroying effect of CSR disclosure, empha- sizing that signicant information asymmetries and potential reputational risks may arise when managers opportunistically utilize CSR reporting to pursue per- sonal interests (Lee, 2017). Additionally, legitimacy theory (Cho & Patten, 2007) contends that CSR disclo- sure may lack value relevance, functioning primarily as a symbolic response to socio-political pressures rather than as a medium for conveying substantive information. Against this backdrop, the present study aims to provide empirical evidence supporting the prevailing theoretical perspective within an emerging and relatively underexplored context. To explore this relationship, the present study investigates the impact of CSR disclosure on rm per- formance and examines its potential role as a buffer during periods of crisis, with particular focus on the COVID-19 pandemic. Empirically, the analysis draws on a unique, hand-collected dataset of CSR disclo- sures from Vietnamese publicly listed rms over the period 2014 to 2021. Consistent with established lit- erature, rm nancial performance is assessed using return on equity (ROE) as a measure of accounting- based performance and Tobin’s Q as an indicator of market-based valuation. Examining the relationship between CSR disclo- sure and nancial performance in Vietnam holds signicant academic and practical relevance. As an emerging economy experiencing rapid integration into global markets, Vietnam is under growing pres- sure to meet international standards of transparency, sustainability, and ethical governance. However, the extent to which CSR disclosure contributes to nan- cial performance remains underexplored, particularly within Vietnam’s unique regulatory and institutional framework, where CSR practices are largely vol- untary. This research is crucial for understanding whether CSR disclosure offers strategic value beyond regulatory compliance, especially in enhancing rm credibility and attracting foreign investment. Further- more, the distinct socio-economic and institutional conditions in Vietnam limit the generalizability of ndings from developed economies. As such, em- pirical research in this context can provide localized insights into how CSR disclosure affects rm out- comes. These ndings will offer practical implications for rms, investors, and policymakers committed to promoting responsible business practices and long- term nancial sustainability in Vietnam. This study makes three key contributions to the literature on CSR disclosure and rm performance, particularly within the underresearched context of Vietnam’s transitional economy. First, it deepens empirical insights into the relationship between CSR disclosure and rm performance by integrating international evidence and applying it to an emerging market. Existing literature offers mixed ndings. For instance, Cho et al. (2015) compare CSR disclosures of Fortune 500 rms in the late 1970s and in 2010 and reveal that greater breadth of disclosure does not necessarily correspond to enhanced investor valuation, thereby challenging the assumption that more extensive CSR reporting always adds value. In contrast, Cahan et al. (2015), drawing on data from 21 countries, nd that unexpected CSR disclosures— those exceeding stakeholder expectations—are positively associated with rm value, especially in countries with weaker institutional environments. Beck et al. (2018), using data from Australia, Hong Kong, and the UK and employing the Global Reporting Initiative (GRI) framework, show that CSR engagement is positively related to both nancial outcomes and operational performance. ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 143 Similarly, Singh and Chakraborty (2021), focusing on Indian rms, develop a multidimensional CSR disclosure index and nd that both the quality and quantity of CSR reporting are positively correlated with accounting-based performance metrics, though not with market-based measures. These studies collectively highlight the complex, context-dependent nature of the CSR–performance relationship, which this paper further explores through the lens of Vietnam’s economic transition. Second, the study addresses a signicant gap in CSR research by focusing on a transitional developing economy, where CSR disclosure remains relatively nascent and institutionally constrained. Prior stud- ies suggest that CSR practices in developed countries are supported by abundant nancial and human capital, active stakeholder engagement, and robust institutional frameworks that facilitate voluntary and transparent CSR practices (Baughn et al., 2007; Chap- ple & Moon, 2005). Conversely, rms in develop- ing economies face signicant limitations, including scarce resources, weaker stakeholder pressure, high government control, and limited autonomy (Bhatia & Makkar, 2019). In such environments, CSR is often driven by regulatory compliance rather than embed- ded ethical norms (Gray et al., 1988). Bhatia and Makkar (2019) nd that CSR disclosure levels in de- veloped economies such as the UK and USA are signicantly higher than those in BRICS countries, reecting these structural differences. Lastly, this study contributes to the growing body of literature that views CSR disclosure as a protective mechanism against adverse events. Shiu and Yang (2017) provide evidence that consistent CSR activities offer insurancelike benets, shielding rms from rep- utational and nancial damage. Albuquerque et al. (2019) argue that CSR reduces systematic risk by enhancing stakeholder loyalty and product differen- tiation. Xu et al. (2020) and Lins et al. (2017) further demonstrate that strong CSR engagement contributes to better crisis resilience, including improved access to capital, stronger performance during downturns, and enhanced stakeholder trust. This study builds on such ndings, conrming that CSR can function not only as a performance enhancer but also as a risk management tool in volatile environments. The article is structured into ve main sections. Sec- tion 1 provides the introduction. Section 2 reviews the relevant literature and formulates the research hy- potheses. Section 3 describes the data sources and out- lines the methodological approach. Section 4 presents empirical ndings along with a detailed discussion. Finally, Section 5 concludes the study by summariz- ing key insights, highlighting practical implications, and suggesting directions for future research. 2 Literature review and hypothesis development 2.1 Theoretical perspectives on CSR disclosure CSR disclosure is frequently examined through two dominant theoretical lenses: legitimacy theory and stakeholder theory. CSR disclosure is frequently in- terpreted through legitimacy theory, which posits that rms aim to align their activities with societal norms to maintain their “license to operate.” According to Suchman (1995), legitimacy is the perception that a company’s actions are appropriate within a socially constructed value system. Organizations therefore disclose social and environmental information not solely for transparency, but to demonstrate align- ment with societal expectations and protect their reputation. Deegan (2002) argues that companies, as members of the broader social system, must avoid ac- tions that could damage their legitimacy. To maintain or restore legitimacy, rms may implement strategies such as educating stakeholders, reframing public per- ceptions, diverting attention from controversies, or reshaping societal expectations (Lindblom, 1994). Le- gitimacy theory is particularly relevant when rms face public scrutiny. Studies such as Deegan and Gordon (1996), O’Donovan (2002), and Patten (1991) highlight that CSR disclosure often increases in re- sponse to external pressure, especially for large or high-prole companies. For example, Deegan and Rankin (1996) found that Australian rms increased environmental reporting following legal action. Gray et al. (2001) observed rising CSR disclosure in the UK, particularly in health and safety. Overall, CSR report- ing is viewed as a strategic tool for managing public perception and sustaining legitimacy. Stakeholder theory offers a complementary expla- nation for CSR disclosure by emphasizing the impor- tance of all groups affected by a rm’s operations. As Freeman (2010) denes, stakeholders include not only shareholders but also employees, customers, suppli- ers, communities, governments, and other interest groups. The theory argues that to maintain legitimacy and operate effectively, rms must respond to the expectations of these diverse stakeholders. Donald- son and Preston (1995) identify three dimensions of stakeholder theory: descriptive (how rms behave), instrumental (linking stakeholder engagement to per- formance), and normative (ethical responsibilities). Deegan et al. (2000) further divide the theory into ethical and managerial branches, with the former promoting equal information access and the latter focusing on satisfying powerful stakeholders. CSR disclosure is seen as a strategic response to stake- holder demands, used to secure ongoing support 144 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 and enhance reputation. Empirical studies support this view. Roberts (1992) found that CSR reporting is linked to stakeholder power and corporate strat- egy, while Epstein and Freedman (1994) showed that external stakeholders prioritize social and environ- mental impacts over nancial ones. Ruf et al. (2001) also demonstrated a positive relationship between CSR and nancial performance. Thus, stakeholder theory frames CSR disclosure as both a strategic and ethical tool to manage stakeholder relationships and promote long-term success. 2.2 CSR disclosure and nancial performance The link between CSR disclosure and nancial per- formance has received increasing scholarly attention across both developed and developing economies. While early studies suggested a generally positive relationship, more recent ndings indicate that this relationship is nuanced and often dependent on in- stitutional, regulatory, and rm-specic contexts. In developed countries, CSR disclosure practices have evolved signicantly over the past few decades. In the UK, Gray et al. (1995) documented substantial changes in social and environmental reporting between 1979 and 1991. Supporting this trend, Campbell (2000) found consistent growth in CSR disclosures in Marks & Spencer’s reports from 1969 to 1997. Campbell (2004) extended the analysis to ten UK rms across ve sectors from 1974 to 2000, identifying limited disclosure in the early 1980s but rapid growth by the late 1980s and early 1990s. In France, Kahloul et al. (2022) examined rms listed on the SBF 120 index between 2008 and 2015. Their results showed a neutral effect of CSR disclosure on rm value (To- bin’s Q) and a negative impact on protability (return on assets [ROA]), suggesting that CSR may enhance market perception without immediately improving operational efciency. In Italy, Rossi and Harjoto (2020) found that nonnancial disclosure ratings were positively associated with rm value and negatively related to risk and agency costs, underscoring the role of regulatory frameworks and third-party verication in strengthening the value of CSR disclosures. In contrast, ndings from developing countries reect more variation, often inuenced by weaker in- stitutions and different stakeholder expectations. In India, Fahad and Busru (2021) found that CSR dis- closure negatively affected both protability and rm value for rms listed on the BSE 500, particularly in environmental and social dimensions. Xu et al. (2020) reported that CSR disclosures added value in China, especially for privately owned enterprises (POEs), while state-owned enterprises (SOEs) bene- tted mainly through risk mitigation. In Bangladesh, Khan et al. (2021) showed a positive relationship be- tween green disclosure and rm value in the banking sector, though the effect was weakened by high non- performing loan ratios. Overall, the literature suggests that the impact of CSR disclosure on nancial performance is highly context-specic. Developed markets benet more from regulatory clarity and stakeholder engagement, while rms in developing economies face institu- tional challenges that can diminish the nancial returns from CSR initiatives. Building on established theoretical frameworks and prior research, we propose the following hypotheses: Hypothesis 1: CSR disclosure is positively correlated with rm nancial performance. Hypothesis 1a: Firms providing detailed governance disclosures in CSR reports demonstrate higher nancial performance due to increased transparency and stakeholder trust. Hypothesis 1b: CSR disclosures emphasizing a clear vision and strategic commitment are positively associated with rm value, reecting alignment with long-term goals and stakeholder expectations. Hypothesis 1c: Greater credibility in CSR reporting, fa- cilitated by external assurance or standardized frameworks, is positively linked to superior market-based performance. 2.3 CSR disclosure as an insurancelike mechanism CSR disclosure has increasingly been recognized not just as a communication tool, but as a strategic asset that mitigates risk and enhances rm resilience during crises. Drawing from stakeholder theory and the resource-based view, CSR builds intangible assets such as trust, legitimacy, and reputation, which serve as buffers in times of disruption—whether nancial, environmental, or reputational. Godfrey (2005) intro- duces the concept of “moral capital,” arguing that CSR fosters goodwill with stakeholders, which can be drawn upon to reduce reputational and nancial damage during adverse events. Transparent CSR dis- closure further strengthens this buffer by signaling a rm’s long-term ethical commitment, thus reinforc- ing stakeholder trust. Fombrun and Shanley (1990) and Roberts and Dowling (2002) similarly emphasize that CSR enhances corporate reputation—a valuable intangible that supports investor condence, espe- cially under stress. Empirical research supports this view. Godfrey et al. (2009) distinguish between institutional CSR (broad societal focus) and technical CSR ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 145 (partner-oriented), nding that only institutional CSR offers risk-reduction benets. Lins et al. (2017) show that rms with strong CSR ratings outperformed their peers in stock returns and operations during the 2008–2009 nancial crisis. Likewise, Poursoleyman et al. (2024) nd that socially responsible rms fared better during COVID-19, with stronger resilience in rm value. Lo et al. (2018) observe similar outcomes in China, where rms with strong CSR reputations experienced less severe market penalties following environmental incidents. Overall, CSR disclosure acts like reputational insurance. It helps build social capital that protects rms against stakeholder backlash and cushions nancial performance during shocks. In doing so, CSR strengthens long-term corporate sustainability and strategic positioning in an increasingly risk-sensitive business environment. Hypothesis 2: Firms with higher levels of CSR dis- closure demonstrate greater nancial resilience during the COVID-19 pandemic, due to enhanced stakeholder trust and reputational capital. 3 Data and methodology 3.1 Research context Over the past decade, Vietnam has made consid- erable progress in CSR disclosure, largely driven by regulatory initiatives and growing stakeholder pressure. A key milestone was Circular 155/2015/TT- BTC, issued by the Ministry of Finance, which came into effect in 2016 and required listed rms to report on environmental and social impacts. Initially, com- pliance was limited, with many companies providing minimal or generic information. However, by 2017, CSR reporting had become more widespread, with leading rms such as Vinamilk and Hoa Sen Group adopting international standards such as the GRI in their standalone sustainability reports. Despite improvements, the quality of CSR dis- closure remains uneven. While some rms show strategic commitment, many continue to offer vague, qualitative content lacking measurable or forward- looking data. The absence of penalties for noncompli- ance also weakens regulatory impact. Vietnam’s stock exchanges have supported CSR adoption through market-based mechanisms. The Ho Chi Minh City Stock Exchange (HOSE) launched the Vietnam Sus- tainable Development Index (VNSI) in 2017, selecting 20 ESG-compliant rms to promote responsible in- vestment. The Hanoi Stock Exchange (HNX) has also assessed corporate governance practices among smaller rms on the Unlisted Public Company Market (UPCoM). Rapid economic growth has come with environ- mental and social costs. Between 2000 and 2015, per capita carbon emissions quadrupled, and in 2024, Vietnam ranked lowest globally in the Envi- ronmental Performance Index. These challenges have heightened public and investor demand for ethical corporate behavior. According to the KPMG (2022) survey, 80% of Vietnamese rms are currently en- gaging in or planning CSR activities. While Vietnam has made promising strides in CSR reporting, key challenges persist—especially in enforcement, data quality, and impact assessment. Continued regulatory support and stronger institutional oversight are es- sential for translating CSR efforts into meaningful and measurable outcomes. 3.2 Sample Our empirical research focuses on analyzing pub- licly listed companies from the top 500 largest en- terprises in Vietnam, according to the 2021 VNR500 ranking, based on the Fortune 500 model. These com- panies either had a sustainability report between 2014 and 2021 or included at least a chapter on so- cial responsibility in their annual reports during this time. After excluding regulated nancial and insur- ance companies, we narrowed the sample to 93 rms over an 8-year period, resulting in 744 balanced rm- year observations. Other data were extracted from the companies’ nancial reports, while nonnancial and CSR-related data were manually gathered from annual reports available on the companies’ websites. The selected time frame, 2014–2021, encompasses both the pre- and postimplementation periods of Circular 155/2015/TT-BTC, introduced by Vietnam’s Ministry of Finance. This regulation mandates that companies listed on the Vietnam Stock Exchange dis- close their social and environmental activities. By examining data from both before and after the regu- lation’s enforcement, we can evaluate the changes in the extent of social responsibility disclosures under voluntary and mandatory frameworks. Circular 155 requires listed companies to detail their commitment to sustainable development and their adherence to the GRI guidelines, as well as the impacts of their activities in their annual reports. Before Circular 155, CSR reporting in Vietnam was still developing, and between 2014 and 2021, compliance with GRI guide- lines was voluntary (Chelli et al., 2018). 3.3 Dependent variable To ensure a comprehensive evaluation of rm per- formance, this study adopts both accounting-based and market-based measures, in line with established 146 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 literature. These metrics are widely recognized for their reliability and relative resistance to manipula- tion (Yoshikawa & Phan, 2003). Accounting-based in- dicators reect a rm’s historical protability but may be inuenced by managerial discretion and variations in accounting standards. In contrast, market-based measures incorporate forward-looking information and investor expectations, offering insights into a rm’s future potential, although they can also be af- fected by investor sentiment rather than fundamental performance (Ullmann, 1985). Specically, this study uses ROE—dened as net income after tax divided by average shareholders’ equity—as the accounting- based measure. 1 Tobin’s Q, calculated as the sum of market capitalization and the book value of debt di- vided by the book value of total assets, serves as the market-based indicator. For robustness checks, ROA and earnings per share (EPS) are also employed as alternative dependent variables. 3.4 Independent variable Annual reports are widely recognized as a pri- mary medium through which companies disclose information related to CSR to external stakeholders (Neu et al., 1998). Their structured and compre- hensive nature makes them an essential source for conducting longitudinal research, providing access to time-specic and historical data across various rms and industries (Bansal, 2005). In this study, a CSR disclosure index was developed based on the 2016 GRI Standards. To evaluate the extent and quality of CSR disclosures, a content analysis methodol- ogy was applied, structured through ve sequential steps. Step 1: Identication of disclosure components The disclosure index was constructed by select- ing reporting items in accordance with the 2016 GRI Standards. The selected items were categorized into four main dimensions: (1) Governance Struc- ture (GOV), (2) Vision and Strategic Commitment (VSTR), (3) Credibility of the Report (CRED), and (4) Economic, Environmental, and Social Indicators (ECEN). The fourth dimension was further disaggre- gated into six subcategories to reect the diversity of CSR performance: economic outcomes, environmen- tal impact, working environment and labor practices, human rights, community involvement, and product responsibility. Step 2: Development of the scoring scheme Based on the dened categories, a structured scor- ing framework was developed to assess CSR dis- closures systematically. The GOV , VSTR, and CRED dimensions each comprised six binary items, where a score of 1 was assigned for each disclosed item and 0 for nondisclosure, yielding a maximum score of 6 per dimension. The ECEN dimension was assessed on an ordinal scale from 0 to 4, reecting increasing depth of disclosure: 0D no disclosure, 1D basic mention, 2D detailed description, 3D comparative or evalu- ative discussion, and 4D inclusion of future goals. The subcategory-specic maximum scores were as follows: ECENsub1 (3 items, 12 points), ECENsub2 (8 items, 32 points), ECENsub3 and ECENsub4 (5 items each, 20 points), ECENsub5 (6 items, 24 points), and ECENsub6 (4 items, 16 points). This scoring approach enabled a granular evaluation of CSR reporting prac- tices across rms (Table 1). Step 3: Assessment of scale reliability To ensure the reliability of the constructed index, a test–retest method was adopted, consistent with the procedures outlined by Hassan and Marston (2019). Two independent coders collected data at separate times, and the results were compared to evaluate intercoder consistency. This method allowed for the verication of scoring stability and minimized the risk of subjectivity in the coding process. Step 4: Validation of the index The validity of the disclosure index was assessed by consulting a panel of practitioners, including auditors and corporate nancial managers. This evaluation fol- lowed the approach proposed by Patelli and Prencipe (2007), with a specic focus on assessing the index’s relevance and applicability within the Vietnamese corporate reporting context. Their feedback informed necessary adjustments to enhance the contextual suit- ability of the scale. Step 5: Measurement of CSR disclosure The nal CSR Disclosure Index was calculated for each rm-year observation as the ratio of the total score obtained by the rm to the maximum achievable score of 142. The resulting value, CSRD i , represents the relative extent of CSR disclosure by the i-th rm and ranges from 0 to 1: CSRD i D (CSRD score o f the i-th company=142) 1 ROE is often preferred over other accounting-based measures such as ROA and return on sales (ROS) due to its direct focus on shareholder protability. ROE assesses how efciently a rm uses shareholders’ equity to generate net income, integrating both operational performance and nancial leverage. Unlike ROA and ROS, which consider total assets or revenue without capturing capital structure, ROE offers a more comprehensive view of value creation for equity holders and is widely used in research and nancial analysis. ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 147 Table 1. The corporate social responsibility (CSR) disclosure index. Code Content Maximum score GOV Information about the governance structure 6 VSTR Vision, strategic commitment of managers, and management mechanisms in the company 6 CRED The information reliability 6 ECEN Economic, environmental, and social outcomes 124 ECENsub1 The information on economic outcomes 12 ECENsub2 The information on environmental outcomes 32 ECENsub3 The information on working environment and professional practice outcomes 20 ECENsub4 The information on human rights outcomes 20 ECENsub5 The information on community responsibility outcomes 24 ECENsub6 The information on product development outcomes 16 Total of scores 142 Note. The table outlines the components of the CSR disclosure index, which was constructed using the 2016 Global Reporting Initiative (GRI) standards and content analysis. CSR disclosures are grouped into four main categories: governance structure (GOV), vision and strategic commitments (VSTR), report credibility (CRED), and economic, environmental, and social indicators (ECEN). Each of the rst three categories includes six binary-scored items (1 if disclosed, 0 if not), yielding a maximum of 6 points per category. The ECEN category comprises six subcategories covering 31 items related to economic, environmental, labor, human rights, community, and product outcomes. This normalized index enables comparative analy- sis of CSR reporting practices across rms and over time, offering a robust measure of both the scope and depth of CSR engagement as communicated through annual reports. Fig. 1 reports the CSR disclosure index from 2014 to 2021. 3.5 Model The relationship between CSR disclosure and rm performance may be inuenced by rm-specic char- acteristics that affect both accounting-based and market-based performance indicators, thereby in- troducing endogeneity concerns. These concerns primarily stem from potential reverse causality— where rm performance inuences CSR disclosure— and omitted variable bias arising from unobserved factors affecting both variables. Supporting this, Wooldridge’s (2002) test reveals serial correlation in both CSR disclosure and nancial performance, underscoring the need for a robust estimation strat- egy. To address these issues, this study employs the Fig. 1. Corporate social responsibility disclosure index (CSRI) over time (2014–2021). 148 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 system generalized method of moments (GMM) es- timator, as proposed by Arellano and Bover (1995) and Blundell and Bond (1998). System GMM is chosen over conventional approaches such as ordinary least squares (OLS), xed effects (FE), and difference GMM because of its capacity to address key econometric challenges in panel data analysis—namely, endogene- ity, unobserved heterogeneity, and dynamic panel bias. In particular, the inclusion of lagged depen- dent variables in dynamic models leads to correlation with the error term, rendering OLS and FE estima- tors inconsistent. System GMM mitigates this issue by using internal instruments, specically lagged levels and rst differences of endogenous variables, which are assumed to be correlated with the regressors but uncorrelated with the error term. Additionally, it enhances estimation efciency by combining the dif- ferenced and level equations, making it particularly effective in the presence of persistent variables and simultaneity. The validity of the model is assessed us- ing the Arellano–Bond test for autocorrelation and the Sargan–Hansen test for overidentifying restrictions. In this study, lagged values of CSR disclosure and control variables, including leverage (LEV), rm size (SIZE), and rm age (AGE), are employed as instru- ments to ensure consistent and unbiased parameter estimates. Specically, we estimate a model to assess the ef- fect of CSR disclosure on ROE and Tobin’s Q, while accounting for the autocorrelation of the dependent variable. CFP it Db 1 Cb 2 Lag(CFP it )Cb 3 CSRD it Cb j X it Cm i C+ it ( ) with j > 3 where corporate nancial performance (CFP) is eval- uated using either ROE or Tobin’s Q, while corporate social responsibility disclosure (CSRD) reects the extent or various aspects of CSR reporting. Control variables (X) include leverage (LEV), rm size (SIZE), and rm age (AGE). The model also accounts for rm-specic xed effects ( m) and an error term (+). The subscripts i and t correspond to rm i at time t, respectively. To ensure the reliability of the GMM esti- mator, two key specication tests are performed. The rst is a second-order autocorrelation test to detect serial correlation in the residuals. The second is the Sargan–Hansen test for overidentifying restrictions, which evaluates the overall appropriateness of the instruments applied in the model. The connection between nancial performance and CSR disclosure can be affected by various additional factors that require control. Research has frequently emphasized the role of rm-specic attributes in shaping CSR disclosure strategies. One key factor is rm leverage, which can affect decisions regarding CSR reporting (Khan et al., 2013). Highly leveraged rms may be more inclined to disclose CSR infor- mation in response to creditor expectations (Roberts, 1992). Additionally, larger rms face greater pres- sure to communicate with stakeholders, providing stronger incentives to adopt comprehensive CSR dis- closure practices (Roberts, 1992; McWilliams & Siegel, 2000). Finally, rm age is commonly viewed as a cru- cial determinant in the adoption and reporting of CSR practices (Rashid et al., 2010). 3.6 Summary statistics We begin by presenting the descriptive statistics. Table 2 outlines these results. On average, Tobin’s Q is 1.026, with a standard deviation of 1.112. The average ROE is 0.155, with a standard deviation of 2.226. On average, the rms in our sample disclose 43.2% of the total CSR items, with the lowest disclosure level being 4.81%, and the highest 89.5%. The average leverage (LEV) of the sampled rms is 52.2%. Firm size aver- ages 29.273, ranging from 25.812 to 33.764. Lastly, the average rm age is 3.013 years. Fig. 2 displays the correlation matrix of all variables across the full sample period using a heatmap. Dark red areas indicate strong positive correlations, while dark blue areas reect strong negative correlations between variable pairs. Additionally, unreported tests show that all variance ination factors (VIFs) are below the critical threshold of 3, indicating that mul- ticollinearity is not a concern in the multivariate analysis. 4 CSR disclosure and nancial performance 4.1 The effects of CSR disclosure on rm performance To evaluate the inuence of CSR disclosure on corporate performance, our study examines 744 rm- year observations from 93 distinct companies span- ning the years 2014 to 2021. The ndings, outlined in Table 3, highlight the connection between CSR disclo- sure and two key variables: Tobin’s Q and ROE. In the rst two columns, Tobin’s Q serves as the dependent variable. Column 1 considers only CSR disclosure and the prior year’s Tobin’s Q as explana- tory variables, while column 2 introduces additional control variables. The estimated coefcients for CSR disclosure (CSRD) are both positive and statistically signicant in these models. Columns 3 and 4 show the relationship between CSR disclosure and rm accounting value. ROE is the left-hand-side variable. The analysis reveals that ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 149 Table 2. Descriptive statistics for the full sample. Variable Mean SD P25 Median P75 N Financial performance Tobin’s Q 1.026 1.112 1.001 1.108 1.186 744 ROE 0.155 2.226 0.015 1.101 1.283 744 Dependent variables CSR disclosure 0.432 4.172 0.076 0.395 1.127 744 GOV 0.021 2.215 0.004 0.012 0.185 744 VSTR 0.028 3.131 0.003 0.019 0.202 744 CRED 0.035 2.054 0.007 0.018 0.257 744 ECEN 0.768 4.003 0.266 0.531 1.044 744 ECENsub1 0.050 1.326 0.012 0.032 0.923 744 ECENsub2 0.185 2.007 0.034 0.082 0.217 744 ECENsub3 0.108 0.905 0.056 0.092 0.302 744 ECENsub4 0.101 1.407 0.040 0.087 0.279 744 ECENsub5 0.130 0.789 0.030 0.077 0.311 744 ECENsub6 0.093 1.003 0.014 0.065 0.258 744 Firm characteristics LEV 0.522 2.194 0.199 0.477 2.125 744 SIZE 29.273 1.308 15.211 28.732 35.362 744 AGE 3.013 3.227 2.311 2.994 3.951 744 Note. The table reports descriptive statistics at the rm level based on all rm-year observations. The sample consists of 744 rm-year observations for 93 unique rms during 2014–2021. All rm-level continuous variables are winsorized at the 1st and 99th percentiles. All variables are dened in the Appendix. the coefcient estimates for CSRD remain positive and statistically signicant in both columns. Addi- tionally, Table 3 demonstrates that the control vari- ables signicantly and consistently affect rm perfor- mance, whether measured by market or accounting value. Notably, nancial leverage (LEV) and rm size (SIZE) show signicant positive coefcients, while years of operation (AGE) exhibit a signicant neg- ative relationship with rm performance across all columns. The specication tests provide additional evidence supporting the causal relationship between CSR dis- closure and rm performance, afrming the suit- ability of the system GMM (S-GMM) approach for this analysis. The validity of the instruments used is conrmed by the Arellano–Bond test for second- order autocorrelation and the Sargan–Hansen test for overidentifying restrictions. As anticipated, prior performance, reected in the one-year lagged value, plays a crucial role in shaping the rm’s current performance. To strengthen the robustness of our ndings, we conducted supplementary analyses using alternative measures of nancial performance. In addition to Tobin’s Q and ROE, we employed ROA and EPS as alternative dependent variables. ROA offers a com- prehensive view of protability relative to total assets, while EPS reects the value created for shareholders. Fig. 2. Heatmap correlation between variables. 150 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 Table 3. The effects of corporate social responsibility disclosure on rm performance. Tobin’s Q ROE (1) (2) (3) (4) CSRD 0.213 0.390 0.217 0.284 (0.084) (0.301) (0.129) (0.213) Lag (Tobin’s Q) 0.398 0.582 (0.231) (0.414) Lag (ROE) 0.382 0.432 (0.225) (0.321) LEV 0.230 0.214 (0.173) (0.120) SIZE 0.112 0.172 (0.081) (0.022) AGE 0.084 0.304 (0.031) (0.240) Intercept 1.009 1.232 3.221 4.154 (0.514) (0.912) (1.932) (3.033) No. of obs. 744 744 744 744 Adjusted R 2 .241 .322 .191 .208 N cross-sections 93 93 93 93 Wald test (P value) .000 .000 .001 .002 Arrellano–Bond test AR(1) (P value) .001 .002 .000 .001 Arrellano–Bond test AR(2) (P value) .076 .088 .179 .211 Sargan test (P value) .000 .000 .001 .000 Hansen test (P value) .134 .105 .255 .431 Note. This table presents GMM regression results assessing the relationship between corporate social responsibility disclosure (CSRD) and rm performance, using 744 rm-year observations from 93 rms over 2004–2021. Tobin’s Q is the dependent variable in columns 1–2, while ROE is used in columns 3–4. Variable denitions are detailed in the Appendix. Standard errors, clustered at the rm level and adjusted for heteroscedasticity, are shown in parentheses. Signicance levels are denoted by , , and for 1%, 5%, and 10%, respectively. The regression results based on ROA and EPS are consistent with those obtained using ROE and Tobin’s Q, conrming the positive association between CSR disclosure and rm performance (see Table 4). These robustness tests enhance the credibility and general- izability of our results, underscoring the reliability of the observed link between CSR disclosure and nan- cial outcomes. 4.2 The effects of CSR categories and CSR subcategories on rm performance Table 5 displays the ndings from our analysis, which categorizes CSR disclosure into four key ar- eas: GOV , VSTR, CRED, and ECEN. In columns 1 through 5, Tobin’s Q serves as the dependent variable. Columns 1 to 4 incorporate the CSR categories, the lagged value of Tobin’s Q, and control variables as independent variables. Of these, only the coefcients for GOV and lagged Tobin’s Q are both positive and statistically signicant. In column 5, which includes all CSR categories alongside lagged Tobin’s Q and control variables, GOV maintains a positive and sta- tistically signicant relationship with Tobin’s Q, while VSTR exhibits a negative and statistically signicant association. In columns 6 to 10, the inuence of CSR categories on rm accounting performance is analyzed, with ROE serving as the dependent variable. Columns 6 to 9 incorporate CSR categories, lagged Tobin’s Q, and control variables. Among these, only VSTR and lagged Tobin’s Q demonstrate statistical signicance. Specically, VSTR exhibits a negative coefcient in column 7, while the coefcient for lagged Tobin’s Q is consistently positive across all four columns. Column 10 incorporates all CSR categories alongside lagged Tobin’s Q and control variables. The ndings reveal a positive and statistically signicant relationship for ECEN, whereas VSTR maintains a negative and sta- tistically signicant association. Table 6 delves into the connection between rm performance and CSR subcategory ratings, which include ECENsub1, ECENsub2, ECENsub3, ECEN- sub4, ECENsub5, and ECENsub6. Columns 1 to 7 utilize Tobin’s Q as the dependent variable, while columns 8 to 14 employ ROE as the dependent vari- able. Columns 1 to 6 and 8 to 13 incorporate CSR sub- categories, lagged Tobin’s Q, and control variables. ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 151 Table 4. The effects of corporate social responsibility disclosure index on rm value—alternative measures. EPS ROA (1) (2) (3) (4) CSRD 0.247 0.334 0.216 0.302 (0.052) (0.044) (0.068) (0.084) Lag (EPS) 0.299 0.471 (0.029) (0.267) Lag (ROA) 0.328 0.489 (0.041) (0.197) LEV 0.311 0.282 (0.143) (0.116) SIZE 0.235 0.219 (0.043) (0.033) AGE 0.132 0.271 (0.024) (0.114) Intercept 1.316 1.343 1.422 1.537 (0.466) (0.377) (0.764) (0.079) No. of obs. 336 336 336 336 Adjusted R 2 .311 .354 .421 .469 N cross-sections 42 42 42 42 Wald test (P value) .000 .001 .000 .000 Arrellano–Bond test AR(1) (P value) .000 .000 .001 .000 Arrellano–Bond test AR(2) (P value) .102 .115 .193 .206 Sargan test (P value) .001 .000 .000 .000 Hansen test (P value) .150 .161 .234 .259 Note. This table reports GMM regression results on the relationship between corporate social responsibility disclosure (CSRD) and rm value, using earnings per share (EPS) and return on assets (ROA) as alternative performance measures. The analysis is based on 336 rm-year observations from 42 rms during 2016–2023. Columns 1–2 use EPS as the dependent variable, while columns 3–4 use ROA. Variable denitions are provided in the Appendix. Standard errors are heteroscedasticity-robust and clustered at the rm level. , , and denote signicance at the 1%, 5%, and 10% levels, respectively. In these models, the coefcients for ECENsub1, ECENsub2, and ECENsub6 are positive and statisti- cally signicant in columns 1, 9, and 13, respectively. Columns 7 and 14, which include all CSR subcat- egories, lagged Tobin’s Q, and control variables, reveal that the coefcients for ECENsub1, ECENsub2, ECENsub4, and ECENsub5 are positive and statis- tically signicant in column 7. Similarly, in column 14, ECENsub1, ECENsub2, and ECENsub4 display positive and statistically signicant coefcients. In contrast, ECENsub3 shows a negative and statisti- cally signicant coefcient in column 7, while in column 14, both ECENsub3 and ECENsub6 exhibit negative and statistically signicant coefcients. Tables 5 and 6 reinforce the results in Table 3, conrming a positive link between CSR disclosure and rm performance. Both Tobin’s Q and ROE in- crease with greater CSR transparency. Table 6 shows that the governance (GOV) dimension has a posi- tive and signicant effect on performance (columns 1 and 5), while the economic, environmental, and social outcomes (ECEN) dimension is also positively signif- icant (column 10). Conversely, the vision and strategy (VSTR) dimension negatively affects performance in several specications, suggesting that symbolic com- mitments may not translate into nancial gains. Further breakdown of CSR subcategories reveals that investments in infrastructure, environmental protection, human rights, and community initiatives enhance rm performance. In contrast, spending on workplace conditions, professional practices, and product development (e.g., labeling and market- ing communications) is linked to lower protabil- ity. These results suggest rms should prioritize outcome-driven CSR initiatives while being selective with resource allocation to symbolic or compliance- focused areas. Overall, the ndings align with prior research, highlighting the nuanced effects of different CSR components on nancial performance. 5 CSR disclosure, COVID-19, and rm performance In this section, we utilize the framework of Bae et al. (2021) to explore the relationship between CSR disclosure and rm performance in the context of the COVID-19 pandemic. The economic repercussions 152 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 Table 5. The effects of corporate social responsibility disclosure on rm performance (categories). Tobin’s Q ROE (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) GOV 0.025 0.091 0.177 0.124 (0.012) (0.023) (0.162) (1.143) VSTR 0.037 0.070 0.082 0.064 (0.215) (0.032) (0.032) (0.020) CRED 0.110 0.034 0.108 0.024 (0.427) (0.571) (0.192) (0.211) ECEN 0.193 0.262 0.108 0.274 (0.188) (0.177) (0.194) (0.111) Lag (Tobin’s Q) 0.269 0.318 0.302 0.332 0.470 (0.110) (0.239) (0.115) (0.125) (0.352) Lag (ROE) 0.234 0.289 0.233 0.314 0.514 (0.121) (0.110) (0.171) (0.131) (0.380) LEV 0.413 0.377 0.292 0.363 0.201 0.192 0.172 0.172 0.132 0.273 (0.244) (0.112) (0.126) (0.142) (0.092) (0.016) (0.051) (0.016) (0.051) (0.113) SIZE 0.217 0.205 0.203 0.323 0.151 0.145 0.154 0.145 0.154 0.192 (0.092) (0.128) (1.074) (0.129) (0.093) (0.018) (0.084) (0.015) (0.084) (0.074) AGE 0.119 0.121 0.108 0.182 0.074 0.162 0.154 0.184 0.144 0.281 (0.063) (0.013) (0.017) (0.101) (0.020) (0.017) (0.020) (0.057) (0.020) (0.131) Intercept 1.293 1.307 1.219 1.285 1.764 2.817 2.014 1.717 2.914 3.901 (0.612) (0.522) (0.142) (0.771) (1.201) (1.156) (0.527) (0.356) (1.027) (3.033) No. of obs. 744 744 744 744 744 744 744 744 744 744 Adjusted R 2 .322 .277 .257 .337 .368 .276 .243 .222 .248 .316 N Cross-sections 93 93 93 93 93 93 93 93 93 93 Wald test (P value) .000 .000 .000 .001 .000 .000 .002 .000 .001 .000 Arrellano–Bond test AR(1) (P value) .000 .000 .001 .000 .000 .002 .001 .000 .000 .003 Arrellano–Bond test AR(2) (P value) .165 .202 .194 .181 .191 .203 .192 .188 .175 .223 Sargan test (P value) .001 .000 .000 .001 .002 .000 .002 .002 .000 .0001 Hansen test (P value) .126 .150 .171 .184 .116 .283 .321 .296 .255 .442 Note. This table presents GMM regression results on the relationship between four types of corporate social responsibility disclosure (GOV , VSTR, CRED, and ECEN) and rm performance. The analysis uses 744 rm-year observations from 93 rms over 2004–2021. Tobin’s Q is the dependent variable in columns 1–5, and ROE is used in columns 6–10. Variable denitions are detailed in the Appendix. Standard errors are heteroscedasticity-robust and clustered at the rm level. , , and indicate signicance at the 1%, 5%, and 10% levels, respectively. of COVID-19 have signicantly impacted rm performance, and CSR is hypothesized to offer insurancelike value by safeguarding shareholders’ wealth (Zhai et al., 2022). Firms actively engaged in CSR initiatives may reduce their exposure to risks, which makes CSR as an important tool for crisis man- agement. Moreover, the pandemic has intensied the emphasis on CSR among governments and market participants, with social and environmental issues becoming central components of recovery strategies in many countries. In response to the crisis, numerous corporations have strengthened their commitment to stakeholder interests, viewing it as a strategy for both generating and protecting shareholder value. The heightened focus on CSR, driven by the economic turmoil caused by the COVID-19 pandemic, presents a distinctive opportunity to empirically examine the hypothesis that CSR acts as a protective mechanism for rm performance during periods of crisis. We estimate the following equation to analyze the connection between CSR reporting and nancial vari- ables in the context of the COVID-19 pandemic: CFP it Db 1 Cb 2 CSRD it Cb 3 CSRD it COVID19 Cb 4 COVID19Cb j X it Cm i C+ it In this framework, the variable COVID19 is a bi- nary indicator assigned a value of 1 for the years 2020 and 2021, and 0 for the period spanning 2004 to 2019. The dependent variable CFP it signies rm performance, while CFP it reects CSR disclosure. The interaction term CFP it * COVID19 illustrates the moderating inuence of the COVID-19 pandemic on the linkage between CSR disclosure and rm performance. Table 7 reports the results. In specications (1) and (4), we nd that rms with higher levels of CSR disclosure performed signicantly better during ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 153 Table 6. The effects of corporate social responsibility disclosure on rm performance (subcategories). Tobin’s Q ROE (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) ECENsub1 0.151 0.204 0.169 0.126 (0.002) (0.213) (0.202) (0.034) ECENsub2 0.097 0.316 0.173 0.172 (0.143) (0.042) (0.070) (0.063) ECENsub3 0.223 0.443 0.213 0.502 (0.425) (0.163) (0.192) (0.294) ECENsub4 0.098 0.603 0.212 0.412 (0.273) (0.115) (0.164) (0.154) ECENsub5 0.064 0.280 0.215 0.115 (0.135) (0.165) (0.185) (0.294) ECENsub6 0.312 0.181 0.218 0.271 (0.277) (0.095) (0.042) (0.094) Lag (Tobin’s Q) 0.347 0.490 0.448 0.382 0.403 0.399 0.533 (0.111) (0.115) (0.311) (0.025) (0.171) (0.112) (0.271) Lag (ROE) 0.193 0.336 0.433 0.314 0.307 0.128 0.314 (0.071) (0.131) (0.171) (0.131) (0.061) (0.013) (0.131) LEV 0.175 0.181 0.355 0.281 0.292 0.269 0.402 0.268 0.232 0.193 0.132 0.142 0.134 0.142 (0.027) (0.072) (0.127) (0.150) (0.116) (0.011) (0.216) (0.112) (0.051) (0.016) (0.051) (0.042) (0.004) (0.051) SIZE 0.079 0.117 0.129 0.200 0.145 0.137 0.345 0.315 0.154 0.045 0.054 0.154 0.069 0.154 (0.052) (0.043) (0.044) (0.070) (0.018) (0.034) (0.115) (0.115) (0.054) (0.015) (0.024) (0.084) (0.023) (0.074) AGE 0.142 0.124 0.136 0.128 0.191 0.203 0.151 0.172 0.074 0.182 0.144 0.152 0.126 0.154 (0.031) (0.020) (0.032) (0.036) (0.007) (0.101) (0.037) (0.057) (0.020) (0.057) (0.020) (0.050) (0.042) (0.020) Intercept 1.517 1.451 1.407 1.405 1.397 1.335 1.517 1.318 1.314 1.117 1.723 1.714 1.461 1.514 (0.443) (0.176) (0.043) (0.205) (0.156) (0.001) (1.056) (0.256) (0.127) (0.456) (0.127) (1.007) (0.012) (0.127) No. of obs. 744 744 744 744 744 744 744 744 744 744 744 744 744 744 Adjusted R 2 .307 .371 .307 .389 .363 .387 .401 .372 .318 .307 .350 .342 .331 .448 Wald test (P value) .000 .001 .000 .002 .001 .001 .003 .000 .000 .000 .000 .001 .000 .000 Arrellano–Bond test AR(1) (P value) .000 .000 .001 .000 .000 .000 .001 .000 .000 .000 .002 .000 .001 .000 Arrellano–Bond test AR(2) (P value) .188 .214 .195 .192 .207 .203 .308 .209 .283 .274 .125 .275 .192 .283 Sargan test (P value) .000 .001 .000 .000 .002 .000 .000 .000 .000 .000 .000 .000 .000 .002 Hansen test (P value) .114 .160 .152 .121 .126 .132 .282 .162 .125 .132 .155 .175 .132 .196 Note. This table presents GMM regression results on the relationship between six subcategories of corporate social responsibility disclosure (ECENsub1–sub6) and rm performance, using 744 rm-year observations from 93 rms during 2004–2021. Tobin’s Q is the dependent variable in columns 1–7, and ROE is used in columns 8–14. Variable denitions are provided in the Appendix. Standard errors are heteroscedasticity-robust and clustered at the rm level. , , and denote signicance at the 1%, 5%, and 10% levels, respectively. 154 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 Table 7. Corporate social responsibility disclosure, COVID-19, and rm performance. Tobin’s Q ROE (1) (2) (3) (4) CSRD 0.136 0.296 0.243 0.302 (0.005) (0.021) (0.133) (0.212) CSRD * COVID19 0.287 0.496 0.321 0.516 (0.031) (0.214) (0.217) (0.243) COVID19 0.288 0.613 0.375 0.548 (0.126) (0.302) (0.198) (0.351) Lag (Tobin’s Q) 0.305 0.377 (0.161) (0.106) Lag (ROE) 0.401 0.467 (0.229) (0.263) LEV 0.314 0.362 (0.025) (0.044) SIZE 0.143 0.127 (0.023) (0.041) AGE 0.179 0.116 (1.103) (0.064) Intercept 2.187 2.307 2.409 2.965 (1.062) (1.316) (1.392) (2.152) No. of obs. 744 744 744 744 Adjusted R 2 .267 .319 .203 .278 N Cross-sections 93 93 93 93 Wald test (P value) .001 .000 .003 .000 Arrellano–Bond test AR(1) (P value) .000 .001 .001 .001 Arrellano–Bond test AR(2) (P value) .132 .171 .206 .231 Sargan test (P value) .000 .000 .000 .002 Hansen test (P value) .143 .119 .208 .192 Note. This table reports GMM regression results on the relationship between corporate social responsibility disclosure and rm performance, accounting for the COVID-19 pandemic. The analysis uses 744 rm-year observations from 93 rms during 2004–2021. A COVID-19 dummy equals 1 for 2020–2021 and 0 otherwise. Tobin’s Q is the dependent variable in columns 1–2, and ROE is used in columns 3–4. Variable denitions are in the Appendix. Standard errors are heteroscedasticity-robust and clustered at the rm level. , , and denote signicance at the 1%, 5%, and 10% levels, respectively. the COVID-19 pandemic. The interaction between CSR disclosure and the COVID-19 variable is posi- tively associated with rm performance, with signif- icance levels better than 1% across all four speci- cations. This evidence offers initial insights into the mechanism driving the positive relationship between CSR disclosure and rm performance during the pandemic. This study further explores how specic CSR dimensions inuenced rm performance during the COVID-19 pandemic. Table 8 reports interaction effects between CSR components and the pandemic indicator. Results show that the interaction between governance-related CSR (GOV) and the COVID-19 dummy is consistently positive and signicant at the 1% level for both Tobin’s Q (0.177 and 0.285) and ROE (0.269 and 0.313). These ndings suggest that rms with strong governance structures were better equipped to manage disruptions, likely due to more effective decision making and stakeholder communication. The interaction terms for economic, environmental, and social outcomes (ECEN) are also signicantly positive across models, with coefcients ranging from 0.257 to 0.334. This indicates that rms engaging in substantive CSR activities, such as en- vironmental initiatives or community support pro- grams, were more resilient and maintained stronger performance during the pandemic. Conversely, the interaction effects for CSR vision and strategy (VSTR) and credibility of reporting (CRED) are not statistically signicant. This im- plies that while long-term strategic CSR orientation and transparent reporting are important, they did not translate into immediate nancial advantages in times of crisis. Overall, the evidence emphasizes the critical role of operational CSR activities in support- ing rm resilience, particularly under conditions of external shocks such as COVID-19. ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 155 Table 8. Interactive effects of corporate social responsibility dimensions and COVID-19 on rm performance. Tobin’s Q ROE (1) (2) (3) (4) GOV * COVID19 0.177 0.285 0.269 0.313 (0.061) (0.023) (0.056) (0.035) VSTR * COVID19 0.224 0.143 0.281 0.294 (0.271) (0.211) (0.319) (0.323) CRED * COVID19 0.129 0.233 0.311 0.346 (0.201) (0.282) (0.343) (0.366) ECEN * COVID19 0.257 0.289 0.310 0.334 (0.015) (0.114) (0.033) (0.044) Lag (Tobin’s Q) 0.245 0.297 (0.091) (0.132) Lag (ROE) 0.367 0.388 (0.123) (0.067) LEV 0.173 0.284 (0.035) (0.122) SIZE 0.129 0.135 (0.048) (0.026) AGE 0.143 0.155 (0.069) (0.045) Intercept 2.173 2.247 2.358 2.399 (1.209) (1.527) (1.003) (1.358) No. of obs. 744 744 744 744 Adjusted R 2 .289 .327 .304 .323 N Cross-sections 93 93 93 93 Wald test (P value) .000 .000 .001 .000 Arrellano–Bond test AR(1) (P value) .000 .000 .002 .000 Arrellano–Bond test AR(2) (P value) .141 .165 .217 .229 Sargan test (P value) .000 .000 .000 .000 Hansen test (P value) .151 .123 .215 .208 Note. This table presents GMM regression results on the interactive effects of corporate social responsibility dimensions and COVID-19 on rm performance, based on 744 rm-year observations from 93 rms during 2004–2021. The COVID-19 dummy equals 1 for 2020–2021 and 0 otherwise. Tobin’s Q is the dependent variable in columns 1–2, and ROE is used in columns 3–4. Variable denitions are provided in the Appendix. Standard errors are heteroscedasticity-robust and clustered at the rm level. , , and indicate signicance at the 1%, 5%, and 10% levels, respectively. 6 Conclusion This study explores the relationship between CSR disclosure and rm performance, with particular attention to CSR’s potential role as a mitigating mech- anism during periods of economic crisis, notably the COVID-19 pandemic. Drawing on a unique hand- collected dataset of CSR disclosures from Vietnamese publicly listed rms included in the VNR500 from 2014 to 2021, the analysis assesses rm performance using both accounting-based (ROE) and market- based (Tobin’s Q) measures. The empirical results reveal a positive association between CSR disclosure and rm performance across both dimensions. In ad- dition, the study investigates the differential impact of specic CSR components. From a market-based perspective, governance-related disclosures exert a consistently positive and statistically signicant inu- ence on Tobin’s Q. In contrast, the accounting-based analysis indicates that rms with a well-dened CSR vision and strategic commitments tend to achieve higher ROE. The ndings suggest that investments in sound governance structures, environmental compli- ance, and socially responsible product development contribute to improved market valuation and prof- itability. Furthermore, the study provides empirical support for the hypothesis that CSR may function as an insurancelike mechanism, mitigating the ad- verse effects of external shocks such as the COVID-19 pandemic by preserving rm value and protecting shareholders’ interests. This study makes important theoretical contribu- tions to the literature on CSR disclosure and rm performance, particularly in the underresearched context of transitional economies such as Vietnam. First, it advances theoretical understanding of the CSR–performance relationship by applying estab- lished international perspectives to a developing market characterized by institutional transformation and regulatory evolution. While prior studies have re- ported inconsistent ndings regarding the impact of CSR on rm performance—such as Cho et al. (2015), 156 ECONOMIC AND BUSINESS REVIEW 2025;27:141–159 who challenge the assumption that broader disclo- sure leads to greater value, and Cahan et al. (2015), who nd that unexpected CSR disclosure can enhance rm value in weak institutional environments—this study conrms that both the extent and substance of CSR disclosure can positively inuence performance in such contexts. These ndings reinforce contingency theory, which posits that CSR outcomes are shaped by institutional and cultural conditions. Second, the study contributes to theory by illuminating the in- stitutional constraints and structural limitations that rms face in emerging economies. Unlike their coun- terparts in developed markets, rms in transitional settings often engage in CSR primarily to comply with regulations, given limited resources and stakeholder engagement. This underscores the need for theoretical models that incorporate legitimacy-seeking behavior and institutional voids (e.g., Baughn et al., 2007; Bha- tia & Makkar, 2019). Third, the study supports the conceptualization of CSR as an insurancelike mech- anism. It demonstrates that, during the COVID-19 crisis, CSR helped mitigate reputational and nan- cial risks, thereby supporting the view of CSR as a strategic tool for risk management and organizational resilience in uncertain environments. The ndings of this study offer several practical implications for corporate managers, policymakers, and stakeholders, particularly within transitional and emerging economies such as Vietnam. First, for corpo- rate decision makers, the positive association between CSR disclosure and rm performance highlights the strategic relevance of CSR beyond regulatory com- pliance. Firms are encouraged to adopt a proactive and substantive approach to CSR, emphasizing not only the quantity but also the quality of disclosures, particularly in the domains of corporate governance, environmental stewardship, and responsible product practices. Strategic investments in these areas can contribute to enhanced market valuation, improved operational outcomes, and long-term competitive- ness. Second, the study underscores the importance of aligning CSR initiatives with broader business ob- jectives. The observed positive relationship between CSR-oriented vision, strategic integration, and rm protability suggests that embedding CSR within core corporate strategies—rather than treating it as a symbolic or peripheral activity—can yield tan- gible nancial benets. This insight is particularly relevant for rms operating under resource con- straints, where investments must demonstrate clear value. Third, the study provides actionable guid- ance for policymakers seeking to foster more robust CSR practices in developing economies. The nd- ings point to the necessity of institutional support mechanisms, including incentives for voluntary dis- closure, the development of standardized reporting frameworks, and capacity-building programs aimed at strengthening CSR capabilities within rms. Fi- nally, the evidence of CSR’s mitigating role during periods of crisis—such as the COVID-19 pandemic— suggests that consistent CSR engagement enhances organizational resilience. Stakeholders, including in- vestors and consumers, should recognize and support rms that demonstrate sustained CSR commitment, as these rms are better positioned to navigate eco- nomic shocks and uncertainties. While this study contributes valuable insights into the CSR–performance nexus within a transitional economy, several limitations warrant consideration and suggest directions for future research. First, the analysis is based on a sample of publicly listed Vietnamese rms, primarily those included in the VNR500 index. This sampling frame may limit the generalizability of the ndings to smaller enterprises or rms operating in other sectors or institutional set- tings. Future research should consider expanding the scope to include nonlisted rms, small and medium- sized enterprises (SMEs), or undertake cross-country analyses to investigate how institutional variations shape CSR outcomes. Second, the reliance on hand- collected CSR disclosure data, while detailed, intro- duces inherent limitations associated with content analysis. Disclosure practices may not fully reect actual CSR performance, and rms may engage in symbolic actions or “greenwashing.” Subsequent studies could incorporate third-party CSR ratings, ESG performance metrics, or stakeholder perception surveys to triangulate and strengthen the robust- ness of empirical ndings. Third, although the study covers the period from 2014 to 2021 and captures the initial impact of the COVID-19 pandemic, this timeframe remains relatively short for evaluating the long-term effects of CSR engagement. Future longi- tudinal research spanning multiple economic cycles would be instrumental in assessing the durability of the CSR–performance relationship over time. Lastly, further inquiry is needed into the mediating and mod- erating mechanisms that inuence this relationship. Variables such as corporate governance quality, stake- holder engagement intensity, and industry-specic characteristics may shape the strength and direction of CSR’s impact on rm performance, particularly within emerging market contexts. 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Information about the governance structure (GOV) This index captures the extent to which rms disclose governance-related information concerning the oversight of sustainability issues, including environmental, economic, and social aspects. It is constructed based on six binary items (scored 1 if disclosed, 0 otherwise), yielding a maximum score of 6. The normalized GOV index is calculated as the ratio of the rm’s total score to the maximum possible score. Vision, strategic commitment of managers, and management mechanisms (VSTR) This index reects the extent to which rms disclose information regarding management’s long-term vision and strategic commitments related to environmental, economic, and social responsibilities. It is based on six binary disclosure items, with one point awarded for each disclosed item. The index is computed as the total score obtained divided by the maximum score of 6. Information reliability (CRED) This index assesses the reliability and credibility of rms’ environmental, economic, and social disclosures. It is based on six binary items, each scored 1 if disclosed and 0 otherwise. The index is computed as the rm’s total score divided by the maximum score of 6. Economic, environmental and social outcomes (ECEN) This index evaluates the depth and comprehensiveness of rms’ disclosures regarding environmental and social activities. Unlike the GOV , VSTR, and CRED indices, ECEN is assessed using an ordinal scale (from 0 to 4) across multiple subcategories. The nal score is computed as the ratio of the total points assigned across all ECEN items to the maximum possible score, which varies by subcategory. Control variables Financial leverage (LEV) Ratio of total nancial debt to total value of assets. Firm size (SIZE) Natural logarithm of the total assets. Years of operation (AGE) Natural logarithm of (the researching year minus the year of business establishment).