Corporate social responsibility and information asymmetry: Empirical evidence from Vietnam

Abstract

Corporate Social Responsibility (CSR) disclosure is either valuable or just a self-interest tool for managers. To support this point of view, the authors explore whether CSR disclosure can reduce information asymmetry between principals and agents. Using the content analysis technique and the GRI Criteria (Global Sustainability Standards Board, 2016), the authors construct an index system to assess listed firms’ CSR disclosure level. Between 2014 and 2019, 75 industrial enterprises were listed in Vietnam, making up the study sample. The authors use GMM estimating methodologies and numerous tests to ensure the stability of the results. The findings suggest that CSR disclosure reduces information asymmetry caused by the agency problem in Vietnam’s listed companies. As a result, listed companies must continue to engage in CSR disclosure in order to reduce information asymmetry and, as a result, lower agency costs.