Title: Agency problem - a missing link between corporate social responsibility reporting and firm performance

Authors: Hien Thi Tran; Hanh Song Thi Pham; Hung Quang Doan

Addresses: VNU University of Economics and Business, Vietnam National University Hanoi, 144 Xuan Thuy Street, Cau Giay, Hanoi, Vietnam ' Leeds University Business School, Maurice Keyworth Building, University of Leeds, Leeds, LS6 1AN, UK ' Faculty of Basic Science, Foreign Trade University, 91 Chua Lang Street, Hanoi, Vietnam; Department of Business and Management, LUISS Guido Carli University, Rome, Italy

Abstract: This study investigates the mediating impact of agency problem on the effect of CSR reporting to firm performance. Using the OLS regression method to analyse a dataset of 5,831 firm-year observations of 833 large firms from 30 countries across seven years from 2013 to 2019, the study finds that agency problem is a missing link that mediates the influence of CSR reporting on a firm's economic performance. The results hold in the system GMM estimations. The study unpacks the black box of CSR-firm performance relation in which CSR reporting benefits firm performance through diminishing the agency problem. Unlike the existing literature that only emphasises the role of a corporate board to handle agency problem, this study highlights the role of CSR reporting as an alternative mechanism to mitigate agency problem. Our finding confirms that CSR reporting is fruitful to shareholders; CSR reporting can be employed as a measure to improve principle-agent relationship.

Keywords: agency problem; corporate social responsibility; CSR; CSR reporting; performance.

DOI: 10.1504/IJBGE.2025.142914

International Journal of Business Governance and Ethics, 2025 Vol.19 No.1, pp.112 - 130

Received: 19 May 2021
Accepted: 02 Aug 2022
Published online: 02 Dec 2024 *

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