The Interplay between Culture and CSR Performance after Changing to Mandatory CSR Reporting and the Capital Market Impacts

This study examines how the transition from voluntary corporate social responsibility reporting to mandatory corporate social responsibility reporting affects companies and capital markets in terms of information asymmetry. Using a sample of companies across four countries, the impact of mandating corporate social responsibility reporting is analysed over six years in each country. The results show: i) regulation might impact corporate social responsibility performance if reporting rates were low prior to regulation; ii) national culture might be more important in affecting corporate social responsibility performance; iii) financial performance increases in the long term; and iv) the level of information asymmetry decreased.