Disclosure of CSR Performance and Firm Value: New Evidence from South Africa on the Basis of the GRI Guidelines for Sustainability Disclosure

Prior CSR and firm performance research has produced mixed results. Even so, numerous researches examining this relationship from the perspective of international standardisation have primarily concentrated on developed economics. This leaves an obvious gap within the extant literature with regards to evidence from sub-Saharan Africa. The aim of this study is to investigate the relationship between the extent of CSR disclosure performance and firm value, in an emerging institutional setting. Using hand collected data of South African listed companies, we apply the GRI G3.1 guidelines, as a measure of disclosure performance. Based on the panel data fixed effect model, we document a positive but insignificant relationship between CSR disclosure performance and firm value. Secondly, a negative and insignificant relationship was found between environmental disclosure performance and firm value. Lastly, we found a positive and statistically significant relationship between social disclosure performance and firm value. Overall, our findings suggest that CSR disclosure has a limited effect on firm value. Our findings hold for a set of robustness tests. Our findings suggest that the incorporation of sustainability disclosure, on the basis of GRI, is moderately high among the selected companies. Implications of our results suggest that CSR disclosure may not necessarily influence firm value, despite its numerous benefits. We contribute to this line of research from a multi-theoretical perspective.