Abstract

The approach used in this study comprises three stages of analysis. In the first stage, the quality of corporate social responsibility disclosure is the outcome variable while in the second stage, examines the moderating effect of media attention and corporate social responsibility disclosure on the cost of debt financing.

The third stage examines the indirect impact of corporate social responsibility disclosure on upper echelon with MBA degrees and the cost of debt. Secondary data is obtained from company annual reports and databases such as Osiris, Factiva, and Lexis Nexis. The sample data used in this study comprises 728 companies selected from the Billion Ringgit Club membership listing from 2009 to 2015. The study uses EViews software to run the multiple regression analysis, while the SPSS PROCESS MACRO is used to test the indirect effect of upper echelon with MBA degrees, corporate social responsibility, and cost of debt.

The findings in the first stage show that CEOs with an MBA degree and long tenure increase corporate social responsibility disclosure. Besides, board meetings, the board size, and creditors’ power are significant factors influencing corporate social responsibility disclosures. Political connections show a positive and significant relationship to CSR disclosures. In the second stage, the findings indicate there is a moderating effect of media attention on the cost of debt. Finally, in the third stage, the results indicate that there is no indirect effect (mediation) of CSR disclosure on upper echelon with MBA degrees and the cost of debt.

The study highlights that CEOs’ educational level and tenure, creditors’ power, board monitoring mechanisms, and political connections are important in influencing and implementing corporate social responsibility practices amongst firms. Furthermore, stakeholder engagement plays an important role in explaining cross-sectional differences in CSR disclosure.

This may be attributed to the possibility that the traditional concept of maximizing shareholders’ wealth has been replaced with relationship management with stakeholders to achieve organizational legitimacy. Therefore, upper echelon, agency, and stakeholder theories help in explaining the extent of corporate social responsibility disclosures in Malaysia.