Skip to main content
SpringerLink
Log in

Sustainability reporting and corporate reputation of Malaysian IPO companies

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

The aim of this paper is to explore the relationship between sustainability reporting (SR) and corporate reputation (CR) in the context of initial public offering (IPO) companies in the developing market of Malaysia. This study utilises secondary data from 2007 to 2017 derived from the content analysis of the annual reports and Datastream of 139 sampled IPO companies listed on Bursa Malaysia. The study also employs ordinary least squares (OLS) regression. The result shows that CR has a positive association with SR quantity and quality and its dimensions, i.e., society, environmental, employee, and product. This result suggests that IPO companies can use SR practices to improve their CR. Most companies give little attention to SR issues. More research should be conducted to examine the SR by IPO companies due to the significant role that SR plays in improving the CR of Malaysian IPO companies. The findings can be used by financial institutions and regulatory bodies to encourage companies to be more responsible on SR issues. Businesses should incorporate social practices into their SR decisions. This paper underlines the importance of integrating social and organisational activities.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Data availability

All the required information regarding SR is gathered from the IPOs found in Bursa Malaysia’s website at www.bursamalaysia.com.my or the companies’ websites. The annual reports of the IPOs listed on Bursa Malaysia are used to obtain the data from 2007 to 2017. All data and outputs are available and can be shared whenever required.

References

  • Abd Rahim N (2016) The extent of online corporate social responsibility (CSR) disclosure: the Malaysian context. Journal of Global Business and Social Entrepreneurship 2(5):12–24

    Google Scholar 

  • Abdullah Y, Ahmad-Zaluki NA, Abd Rahim N (2019) Supply chain strategy in initial public offering in Malaysia: a review of long-run share price performance. International Journal of Supply Chain Management 8(4):642–652

    Google Scholar 

  • Abdullah Y, Ahmad-Zaluki NA, Abd Rahim N (2021) Determinants of CSRD in non-Asian and Asian countries: a literature review. Journal of Global Responsibility 12(1):114–135

    Article  Google Scholar 

  • Abu Bakar N, Rosbi S (2016) Long term performance of Islamic share price for initial public offerings (IPOs) in Malaysia: evidence from sharia-compliant companies listed on the Malaysian stock exchange (2006–2010). International Journal of Management Science and Business Administration 2(6):55–66

    Google Scholar 

  • Abu Bakar N, Rosbi S, Uzaki K (2019) Evaluation of long term performance for initial public offerings using market adjusted cumulative abnormal returns (MACAR): a case study of Islamic finance in Malaysia. International Journal of Advances in Scientific Research and Engineering 5(1):51–85

    Article  Google Scholar 

  • Aerts W, Cormier D (2009) Media legitimacy and corporate environmental communication. Acc Organ Soc 34:1–27

    Article  Google Scholar 

  • Alazzani A, Aljanadi Y, Shreim O (2019) The impact of existence of royal family directors on corporate social responsibility reporting: a servant leadership perspective. Social Responsibility Journal 15(1):120–136

    Article  Google Scholar 

  • Ali I, Rehman KU, Ali SI, Yousaf J, Zia M (2010) Corporate social responsibility influences, employee commitment and organizational performance. Afr J Bus Manage 4(12):2796–2801

    Google Scholar 

  • Anas A, Abdul Rashid HM, Annuar HA (2015) The effect of award on CSR disclosures in annual reports of Malaysian PLCs. Social Responsibility Journal 11(4):831–852

    Article  Google Scholar 

  • Anderson R, Reeb D (2003) Founding-family ownership and firm performance: evidence from the S&P 500. Journal of Finance 58(3):1301–1328

    Article  Google Scholar 

  • Bartley T (2007) Institutional emergence in an era of globalization: the rise of transnational private regulation of labor and environmental conditions. Am J Sociol 113(2):297–351

    Article  Google Scholar 

  • Bebbington J, Larrinaga C, Moneva JM (2012) Corporate social reporting and reputation risk management. Accounting, Auditing & Accountability Journal 21(3):337–361

    Article  Google Scholar 

  • Bernstein B (2000). Official knowledge and pedagogic identities: the politics of recontexualising, in S. J. Ball (ed.), the sociology of education: Major themes (London: RoutledgeFalmer)

  • Beurden PV, Gossling T (2008) The worth of values-a literature review on the relation between corporate social and financial performance. J Bus Ethics 82(2):69–82

    Google Scholar 

  • Bowerman S, Sharma U (2016) The effect of corporate social responsibility disclosures on share prices in Japan and the Uk. Corp Ownersh Control 13(2):202–216

    Article  Google Scholar 

  • Brammer S, Millington A (2004) An empirical examination of institutional investor preferences for corporate social performance. J Bus Ethics 52:27–43

    Article  Google Scholar 

  • Carlisle YM, Faulkner DO (2005) The strategy of reputation. Briefings Entrepreneurial Finance 14(8):413–422

    Google Scholar 

  • Carpentier C, Suret JM (2018) Three decades of IPO markets in Canada: evolution, risk and return. Accounting Perspectives 17(1):123–161

    Article  Google Scholar 

  • Carroll AB, Shabana KM (2010) The business case for corporate social responsibility: a review of concepts, research and practice. Int J Manag Rev 12:85–105

    Article  Google Scholar 

  • Chang YB, Kwon YO (2020) Attention-grabbing IPOs in early stages for IT firms: An empirical analysis of post-IPO performance. J Bus Res 109(1):111–119

    Article  Google Scholar 

  • Chien F, Ajaz T, Andlib Z, Chau KY, Ahmad P, Sharif A (2021) The role of technology innovation, renewable energy and globalization in reducing environmental degradation in Pakistan: a step towards sustainable environment. Renewable Energy 177(2021):308–317

    Article  Google Scholar 

  • Chien F, Hsu CC, Andlib Z, Shah MI, Ajaz T, Genie MG (2022) The role of solar energy and eco-innovation in reducing environmental degradation in China: Evidence from QARDL approach. Integr Environ Assess Manag 18(2):555–571

    Article  Google Scholar 

  • Clarkson MBE (1995) A stakeholder framework for analyzing and evaluating corporate social performance. Acad Manag Rev 20(1):92–117

    Article  Google Scholar 

  • Davies K (1973) The case for and against business assumption of social responsibilities. Acad Manag J 6:312–322

    Article  Google Scholar 

  • De Klerk M, De Villiers C, Staden CV (2015) The influence of corporate social responsibility disclosure on share prices. Pac Account Rev 27(2):208–228

    Article  Google Scholar 

  • Du S, Bhattacharya CB, Sen S (2007) Reaping relational rewards from corporate social responsibility: the role of competitive positioning. Int J Res Mark 24:224–241

    Article  Google Scholar 

  • Fombrun CJ (1996) Reputation: realizing value from the corporate image. Harvard business school press, Boston, MA, USA

    Google Scholar 

  • Fomrun CJ, Gardberg N (2000) Who’s top in corporate reputation. Corp Reput Rev 3(1):13–17

    Article  Google Scholar 

  • Freeman R (1984) Strategic management: a stakeholder perspective. Prentice-Hall, Englewood Cliffs, NJ

    Google Scholar 

  • Friedman M (1970). The social responsibility of business is to increase its profits. New York times magazine, 13 September, 22–26

  • Gallego-Ãlvarez I, García-Sánchez IM, Rodríguez-Dominguez L (2010) The influence of gender diversity on corporate performance. Rev de Contab 13(1):53–88

    Article  Google Scholar 

  • Ghuslan MI, Jaffar R, Saleh NM, Yaacob MH (2021) Corporate governance and corporate reputation: the role of environmental and social reporting quality. Sustainability. https://doi.org/10.3390/su131810452

    Article  Google Scholar 

  • Giannarakis G, Sariannidis N (2012) The role of corporate social responsibility in an unstable environment: an examination of trends 2008–2010. Int J Manag 29(4):579–589

    Google Scholar 

  • Goll I, Johnson NB, Rasheed AA (2007) Knowledge capability, strategic change, and firm performance The moderating role of the environment. Management Decision 45(2):161–179

    Article  Google Scholar 

  • Gray R, Kouhy R, Lavers S (1995) Corporate social and environmental reporting: a review of the literature and a longitudinal study of UK disclosure. Accounting, Auditing and Accountability Journal 8(2):47–77

    Article  Google Scholar 

  • Hair J, Black WC, Babin BJ, Anderson RE (2010) Multivariate data analysis, 7th edn. Pearson Education International, Upper saddle river, New Jersey

    Google Scholar 

  • Healy P, Palepu K (2001) Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature. J Account Econ 31(1):405–440

    Article  Google Scholar 

  • Ibrahim NA, Ismail N (2012) The association of ownership structure and the management earnings forecast: the case of Malaysian initial public offerings (IPOs). Business, Engineering and Industrial Applications (ISBEIA), 2012 IEEE Symposium

  • Jamali D (2008) A stakeholder approach to corporate social responsibility: a fresh perspective into theory and practice. J Bus Ethics 82(1):213–231

    Article  Google Scholar 

  • Kang S, Kim A (2019) Employee stock ownership and financial performance in European countries: the moderating effects of uncertainty avoidance and social trust. Hum Resour Manage 58(6):1–15

    Article  Google Scholar 

  • Kuvaas B (2019) Human resource management systems, employee well-being, and firm performance from the mutual gains and critical perspectives: the well-being paradox. Hum Resour Manage 8:1–19

    Google Scholar 

  • Liu Y, Miletkov MK, Wei Z, Yang T (2014) Board independence and firm performance in China. J Corp Finan 30:223–244

    Article  Google Scholar 

  • Liu L, Neupane S, Zhang L (2022) Firm location effect on underwriting, subscription, and underpricing: evidence from IPOs in China. Econ Model 108(3):105778

    Article  Google Scholar 

  • Luo Y, Qian X, Ren J (2015) Initial public offerings and air pollution: evidence from China. Journal of Asia Business Studies 9(1):99–114

    Article  Google Scholar 

  • Margolis JD, Elfenbein HA, & Walsh JP (2007) Does it pay to be good? A meta-analysis and redirection of research on the relationship between corporate social and financial performance. Working paper, Harvard Business School

  • McWilliams A, Siegel D (2000) Research notes and communications. Corporate social responsibility and financial performance: correlation or misspecification? Strategic Management Journal 21(5):603–609

    Article  Google Scholar 

  • McWilliams A, Siegel D, Wright PM (2006) Corporate social responsibility: strategic implications. J Manage Stud 43(1):1–18

    Article  Google Scholar 

  • Melo T, Garrido-Morgado A (2012) Corporate reputation: a combination of social responsibility and industry. Corp Soc Responsib Environ Manag. https://doi.org/10.1002/csr.260

    Article  Google Scholar 

  • Murray KB, Vogel CM (1997) Using a hierarchy of effects approach to gauge the effectiveness of corporate social responsibility to generate goodwill toward the firm: Financial versus nonfinancial impacts. Journul of’Business Research 38(2):141–159

    Google Scholar 

  • Murray A, Sinclair D, Power D, Gray R (2006) Do financial markets care about social and environmental disclosure? Further evidence and exploration from the UK. Accounting, Auditing and Accountability Journal 19(2):1–16

    Article  Google Scholar 

  • Nassani AA, Yousaf Z, Radulescu M, Haffar M (2022) Environmental performance through environmental resources conservation efforts: does corporate social responsibility authenticity act as mediator? Sustainability 14:1–16

    Article  Google Scholar 

  • Ponzi LJ, Fombrun CJ, Gardberg NA (2011) RepTrak pulse: Conceptualizing and validating a short-form measure of corporate reputation. Corp Reput Rev 14(1):15–35

    Article  Google Scholar 

  • Prado-Lorenzo J, Gallego-Alvarez I, Garcia-Sanchez I (2009) Stakeholder engagement and corporate social responsibility reporting: the ownership structure effect. Corp Soc Responsib Environ Manag 16(2):94–107

    Article  Google Scholar 

  • Rashid A (2018) Board independence and firm performance: evidence from Bangladesh. Future Business Journal 4(1):34–49

    Article  Google Scholar 

  • Ritter JR (1991) The long-run performance of initial public offerings. Journal of Finance 46(1):3–27

    Article  Google Scholar 

  • Rose S, Thomsen T (2004) The impact of corporate reputation on performance: some danish evidence. Eur Manag J 22(2):201–210

    Article  Google Scholar 

  • Sadou A, Alom F, Laluddin H (2017) Corporate social responsibility disclosures in Malaysia: evidence from large companies. Social Responsibility Journal 13(1):177–202

    Article  Google Scholar 

  • Saleh M, Zulkifli N, Muhamad R (2011) Looking for evidence of the relationship between corporate social responsibility and corporate financial performance in an emerging market. Asia-Pacific Journal of Business Administration 3(2):165–190

    Article  Google Scholar 

  • Shahid MN, Siddiqui MA, Qureshi MH, Ahmad F (2018) Corporate governance impact on firm performance: evidence from cement industry of Pakistan. Journal of Applied Environmental and Biological Sciences 8(1):35–41

    Google Scholar 

  • Sharma S, Henriques I (2005) Stakeholder influences on sustainability practices in the Canadian forest products industry. Strateg Manag J 26:159–180

    Article  Google Scholar 

  • Singla HK (2019) A comparative analysis of long-term performance of construction and non-construction IPOs in India. Eng Constr Archit Manag 26(10):2447–2473

    Article  Google Scholar 

  • Sun Y, Li H, Andlib Z, Genie MG (2022) How do renewable energy and urbanization cause carbon emissions? Evidence from advanced panel estimation techniques. Renewable Energy 185:996–1005

    Article  CAS  Google Scholar 

  • Teoh HY, Thong G (1984) Another look at corporate social responsibility and reporting: an empirical study in a developing country. Acc Organ Soc 9(2):189–206

    Article  Google Scholar 

  • Verbeeten FH, Gamerschlag R, Möller K (2016) Are CSR disclosures relevant for investors? Empirical evidence from Germany. Management Decision 54(6):1359–1382

    Article  Google Scholar 

  • Waddock SA, Graves SB (1997) The corporate social performance-financial performance link. Strateg Manag J 18(4):303–319

    Article  Google Scholar 

  • Wan Ahamed WS, Almsafir MK, Al-Smadi AW (2014) Does corporate social responsibility lead to improve in firm financial performance? Evidence from Malaysia. Int J Econ Financ 6(3):126–138

    Article  Google Scholar 

  • Wang H, Qian C (2011) Corporate philanthropy and corporate financial performance: the roles of stakeholder response and political assess. Acad Manag J 54:1159–1181

    Article  Google Scholar 

  • Zainal D, Zulkifli N, Saleh Z (2013) Corporate social responsibility reporting in Malaysia: a comparison between shariah and non-shariah approved firms. Middle-East J Sci Res 15(7):1035–1046

    Google Scholar 

  • Zhang P, Wn X (2022) Spatiotemporal evolution characteristics of urbanization and its coupling coordination degree in Russia — perspectives from the population, economy, society, and eco-environment. Environ Sci Pollut Res. https://doi.org/10.1007/s11356-022-20215-z

    Article  Google Scholar 

Download references

Acknowledgements

The authors are grateful to the anonymous referees of the journal for their extremely useful suggestions to improve the quality of the paper.

Author information

Authors and Affiliations

  1. Department of Business Administration, Collage of Administration and Economics, Almaaqal University, Basrah, Iraq

    Yasir Abdullah Abbas & Yusra Yaseen Lazim

  2. School of Economics, Finance and Banking, Universiti Utara Malaysia, Sintok, Kedah, Malaysia

    Waqas Mehmood

  3. School of Business Management, Universiti Utara Malaysia, Sintok, Kedah, Malaysia

    Attia Aman-Ullah

Authors
  1. Yasir Abdullah Abbas
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Waqas Mehmood
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Yusra Yaseen Lazim
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Attia Aman-Ullah
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

Yasir Abdullah Abbas: original draft. Waqas Mehmood: review. Yusra Yaseen Lazim: formal analysis. Attia Aman-Ullah: review and supervision.

Corresponding author

Correspondence to Waqas Mehmood.

Ethics declarations

Ethics approval

This article does not contain any involvement from human and animals.

Consent to participate

Not applicable.

Consent for publication

The authors do not have any consent issue to publish this research paper.

Competing interests

The authors declare no competing interests.

Additional information

Responsible Editor: Arshian Sharif

Publisher's note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

Table 7

Table 7 List of SR items
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Abbas, Y.A., Mehmood, W., Lazim, Y.Y. et al. Sustainability reporting and corporate reputation of Malaysian IPO companies. Environ Sci Pollut Res 29, 78726–78738 (2022). https://doi.org/10.1007/s11356-022-21320-9

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-022-21320-9

Keywords

Search

Navigation