Abstract
This article examines corporate social disclosures (CSD) in an African developing economy (Mauritius) as provided in the annual reports of listed companies from 2004 to 2007. Informed by the country’s social, political and economic context and legitimacy theory, we hypothesise that the extent and variety of CSD themes (social, ethics, environment and health and safety) will be enhanced post-2004 and will be influenced by profitability, size, leverage and industry affiliation. We find a significant increase in the volume and variety of CSD, although information in relation to social activities remains the most prominent form of disclosure. This is in contrast to previous studies which reported on the primacy of employee disclosures in developing countries. Using a pooled regression analysis, we also observe that size does explain variations in overall CSD and social disclosures, whilst leverage is positively related to changes in environmental and health and safety disclosures. There is no profitability relationship, and the effects of industry affiliation on CSD are non-significant or contrary to expectations. Overall, we assert that legitimacy, as a strategic and managerially driven approach favouring symbolic actions, is the prevailing motivation underlying the progression of CSD in Mauritius.
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Notes
According to the World Bank (2009), the per capita income for 2008 was US $6,400. Notwithstanding the effects of the economic difficulties, Mauritius remains regularly highlighted as one of the most improving economies in Africa and it is currently ranked fifth in terms of GDP per capita in the region. The recent report on ‘Doing Business 2010’ (World Bank 2010) ranked Mauritius as the best country in Sub-Saharan Africa (and 17th worldwide) in terms of the ease of doing business.
The United Nations Population Division (2009) reports that Mauritius’ population density currently stands at 614 per square kilometre—which places the country as the 18th most densely populated nation in the world.
In accordance with dummy variable procedures in regressions and to address the issue of perfect multi-collinearity (e.g. refer to Cowen et al. 1987, p. 177; Haniffa and Cooke 2005) in the empirical model, one has to include one less dummy variable than the possible qualitative states in the data i.e. one less variable for industry classification. The industry classification is based on the one used by the local stock exchange. The same would apply to cases where the dummy variable relates to a particular period (e.g. 2005, 2006 or 2007).
Recent evidence of how companies in Mauritius perceive their current CSR ‘roles’ was obtained from a local trade association report (Mauritius Employers Federation 2007). Key findings were that 69% of enterprises are engaged in external social activities with NGOs and government bodies for the benefit of the wider community with an emphasis on donations, sponsorships, cultural activities and educational scholarships.
We thank one of the reviewers for suggesting this approach.
Ubuntu is a communitarian principle of reciprocity and interdependence and is often presented as a moral principle to encourage people to help and support each other in society. It is seen as a form of African humanitarianism that includes ‘alms-giving, being sympathetic, caring, sensitive to the needs of others, being respectful, considerate, patient and kind’ (cited from West 2006, p. 439).
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Mahadeo, J.D., Oogarah-Hanuman, V. & Soobaroyen, T. A Longitudinal Study of Corporate Social Disclosures in a Developing Economy. J Bus Ethics 104, 545–558 (2011). https://doi.org/10.1007/s10551-011-0929-3
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DOI: https://doi.org/10.1007/s10551-011-0929-3