Unveiling the Effectiveness of Agency Cost and Firms' Size as Moderators Between CSR Disclosure and Firms' Growth

Aswad Akram; Yingkai Tang; Jasim Tariq

doi:10.3389/fpsyg.2020.01624

Unveiling the Effectiveness of Agency Cost and Firms' Size as Moderators Between CSR Disclosure and Firms' Growth

Front Psychol. 2020 Aug 13:11:1624. doi: 10.3389/fpsyg.2020.01624. eCollection 2020.

Authors

Aswad Akram¹, Yingkai Tang¹, Jasim Tariq²

Affiliations

¹ Business School, Sichuan University, Chengdu, China.
² Department of Business Administration, Iqra University, Islamabad, Pakistan.

Abstract

The excellence of corporate governance in companies lies in their ability to adopt the corporate social responsibility (CSR), which enhances their growth. This study examines the effect of agency cost, firm size, and CSR disclosure on the firms' growth. Specifically, the study analyzed the agency cost and firms' size as the moderators that influence the firms' performance asymmetrically. In its approach, the study compiled data of 300 Pakistani listed companies, which have a significant concern with CSR for the period 2010-2018. Using the 2SLS and GMM instrumental panel regressions, our empirical results show that the agency cost is detrimental to the firms' growth. In contrast, the firms' size boosts the firms' growth. Moreover, the growth of firms with leverage declines and the presence of independent directors improves the firms' growth.

Keywords: Pakistani companies; agency cost; corporate social responsibility; firm growth; firm size.