DETERMINANTS OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE IN SAUDI ARABIA

Abstract

This research study examines the present practices of corporate social responsibility disclosure (CSRD)
and whether company characteristics are promising determinants of CSRD in Saudi listed firms. This
research paper extends the current literature by analyzing the drivers of CSR disclosure in a developing
economy that lacks empirical evidence in this area. This study employs the technique of content analysis
to investigate the practices of CSR disclosure in the annual reports of listed companies on Tadawul
Stock Exchange in 2010-2019. Ordinary Least Square has been used to investigate the relationship
between CSR disclosure and independent variables (leverage, size and profitability). In Saudi Arabia’s
context, CSR disclosure varies across industries and companies. The findings also reveal strong
evidence that disclosure of CSR is significantly associated with profitability and size. This mentions
that the bigger companies in terms of profitability and size discloses its social information. Thus,
legitimacy theory related to social visibility is the most appropriate theory for describing CSR disclosure
practices in Saudi Arabia listed companies. This research paper provides a significant contribution to
estimate the Saudi Arabia CSR reporting which is a developing economy. This study will benefit all
stakeholders with an interest in corporate reporting. The outcomes of the study emphasize on the need
for regular updates of CSR information provided on companies’ annual reports.