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This chapter presents the background, objective and research questions, significance, assumptions and limitations, and outline of the thesis. The background section discusses issues relate to the development of corporate social responsibility disclosure studies. The research questions and objective section presents the primary objective and the specific of research questions. The section of significance of thesis contains explanation of the importance and the last section of this chapter pertains to outline of the thesis.
To date, there is a rapid global transformation with increased demand on corporations to perform not only financial but to be good corporate citizenship  . One of the most important aspects of this transformation is the critical importance of corporate social responsibility (CSR) activities (KPMG 2008).
The increasing demand on companies to be more responsible is manifested by the evidence that there has been an increase of CSR reporting  in many firms around the world (Bebbington 2008).
The KPMG International Survey provides data that CSR reporting has gone mainstream, with nearly 80 percent of the largest 250 companies from 22 countries issuing stand alone reports, up from about 50 percent in 2005 (KPMG 2008). Yet, CSR reporting is imbalanced globally. This survey shows that CSR in developed countries is higher than developing countries. Variations in CSR reporting between countries may be influenced by the stage of economic development, different at social and economic development present different concerns and priorities (Xiao et al. 2005).
In the same way, the intensification in corporate social responsibility disclosure (CSRD)  separate recording coincides with an upturn in community concern regarding social and environmental matters and in academic accounting research (Van der Laan Smith et al. 2005). The growing accounting research in CSRD area has largely focused on the extent and determinants of CSRD (see for example Spicer 1978; Trotman et al. 1981; Cowen et al. 1987; Belkaoui and Karpik 1989; Ness and Mirza 1991; Robert 1992; Hackston and Milne 1996; Tsang 1998; Kuasarikun and Sherer 2004; Haniffa and Cooke 2005; Naser et al. 2006; Ratanajongkol et al. 2006; Nurhayati et al. 2006; Jamali and Mirshak 2007; Branco and Rodriguez 2008; Clarkson et al. 2008, Islam and Deegan 2008; Reverte 2009). mMost of these studies have been conducted in a single country setting. However, CSRD studies with data from only a single country evokes the potential for failure to link empirical results to the political, economy or cultural characteristics of broader jurisdictional units (Williams 1999). Whereas, an international comparison as conducted in this thesis, offers deeper insights.
Further, there has been some international research examining institutional factors that may influence CSRD (see for example Williams 1999; Buhr and Freedman 2001; Holland and Foo 2003; Chapple and Moon 2005;Van der Laan Smith et al. 2005; Xiao et al. 2005; Baughn et al. 2007). These studies indicate that country/region of origin (Newson and Deegan 2002; Van der Laan Smith et al. 2005), culture, institutional factors (Buhr and Freedman 2001), the stage of nation's social and economic development (Chapple and Moon 2005; Xiao et al. 2005), and legal and regulatory context (Holland and Foo 2003) are important determinants of the level and type of CSRD. In addition, Baughn et al. (2007) reveal that relationship between CSRD and jurisdictionalcountry economic, political, and social contexts reflect the importance of a country's development of such institutional capacity to promote and support CSRD practices.
However, most of these studies are generally limited only to very specific and limited environmental or social aspects. They usually have not comprehensivelywell analysed the broader holistic areas of CSR, ranging acrosssuch as economic, human rights, labour practices and decent work, product responsibility and society aspects. Therefore, Tthis thesis utilises a different and more comprehensive measurement construct to close the gap and investigate all aspects of CSR. This is important because it is argued that CSR is more than just caring about the environment, all aspects of CSR should be included for a comprehensive analysis (Godfrey and Hatch 2007). This thesis also enhances the measure of CSR measurement through adoption of the internationally reknown Global Reporting Initiative (GRI) (2006) template to capture internationally current stakeholder concerns on economic, environmental, and social issues (Frost et al. 2005). As mentioned above, the GRI (2006) template contains three performance indicators; economic, environmental, and social. Social indicators are further categorized by labor, human rights, society, and product responsibility. These indicators are defined as follows:Economic, the economic dimension concerns the organizations's impacts on the economic condition of its stakeholder and on economic systems at local, national, and global level. The economic indicator is measured by three sub indicators; economic performance, market presence, and indirect economic impacts.Environmental, the environmental dimension concern the organizations's impacts on living and non-living natural systems, including ecosystems, land, air, and water. The environmental indicator is measured by eight sub indicators; materials; energy; water; biodiversity; emissions, effluents, and waste; products and services; compliance; and transport.Social dimension concerns the impacts an organization has on the social systems within which it operates. The GRI social dimensions identify four key aspects:Labor practices and decent work. This indicator is measured by five sub indicators; employment; labor or management relations; occupational health and safety; training and education; and diversity and equal opportunity.Human rights. This indicator is measured by eight sub indicators; investment and procurement practices; non-discriminant; freedom of association and collective bargaining; abolition of child labor; prevention of forced and compulsory labor; complaints and grievance practices; security practices; and indigenous rights.Product responsibility. This indicators address the aspects of a reporting organization's product and services that directly affect customer, namely, health and safety, product and service labeling, marketing communications, customer privacy, and compliance.Society. This indicators focus attention on the impacts organizations have on the communities in which they operate, and disclosing how the risks that may arise from interactions with other social institutions are managed and mediated. Five aspects is used to measure this indicator; community, corruption, public policy, anti-competitive behavior, and compliance.GRI (2006) characterises CSR or sustainability as the practice measuring performance on economic, environmental, and social impacts to internal and external stakeholders. This thesis adopts the 2006 GRI as guidelines for measuring economic, environmental and social performance, because :It is broader than other definitions and it covers the six themes that can be found in annual report, company's website or stand alone reports which are economic, environment, human rights, labour and decent work, product responsibility, and society.It enables stakeholders to more easily compare information accross companies, both domestically and internationally (ACSI 2008).It has a high international profile and influence (Adams 2004).It represents the best practice and the most complete and up-to-date reporting framework that exists (Deegan 2005).It is also well suited for all industry types company (Willis 2003). The KPMG International Survey in 2008 shows that more than three-quarters of Global Fortune 250 companies and 70 percent of the 100 largest companies in 22 countries use the GRI Guidelines for their reporting (KPMG 2008). Employing GRI allows the construction of a benchmark disclosure index consistent with this thesis research approach (Frost et al. 2005; Ho and Taylor 2007; Cahaya et al. 2008; Clarkson et al. 2008; Evaraert et al. 2009).
The next section details objective and the specific research questions of this thesis.1.2 Research Questions Thesis Objectives
The research questions of this thesis are:
To what extent does corporate social responsibility (CSRD) vary across the sample?
What company and institutional factors explain corporate social responsibility disclosure (CSRD) communication?
To answer this questions, this thesis has two objectivesobjectives. The first is to provide comparative evidence on CSRD practices using data from a large number ofvarious countries from around the world and to determine to what extent does CSRD vary across jurisdictions. The second is to analysedetermine how company and institutional factors account for CSRD.
1.3 Significance of the Thesis
The significant There are five major contributions offered fromof this thesis. are as follows: First, Pprevious studies on CSRD practices have almost solelylargely focused on the annual report. They assumed that annual reports contain the key information on social and environmental. However, as a reporting medium, the annual reports still face the limitation in the number of indicators observed and diversity of information provided (Frost et al. 2005).
Some of past researches hashave shownbeen showing that companies now rely more heavilying on alternative media to communicate social and environmental informations such as discrete reports (Tilt 2001; Frost et al. 2005; Ho and Taylor 2007), or internet (Frost et al. 2005; Ho and Taylor 2007). The use of other media raiseselevates questions about the importance of annual report as main channel for conveying sustainability informations (Frost et al. 2005).
This thesis focuses solely on sustainability reports as a better media source to capture and analyse the sustainability information. Frost et al. 2005 conclude that annual reports provide very limited insights into corporate sustainability compared to stand-alone sustainability reports.This research is important to advance a greater a deeper comprehending the extent of companies' CSRD details in sustainability reports
Second, this thesis uniquely explores the role of assurance to improve the credibility of disclosed information (Simnett et al. 2009). There are a great number of companies that rely on assurance statements in order to improve credibility and transparency of corporate social responsibility information. Over 60 percent of sustainability reports issued by companies in France, Spain, Korea, and Italy include assurance statement (KPMG 2008). This raises questions about what drives company seeks assurance statement on sustainability reports.
Despite these advance of demand of assurance statement, research on the effect of assurance on corporate social responsibility reporting is rare (Kolk and Perego 2010). Empirical findings of this thesis will add greater insights about the adoption decision of assurance services for sustainability reporting. In addition, it also contributes to recent literature in international accounting and auditing and to extend a better understanding of adoption of assurance services.
Third, this thesis looks at companies throughout the globe using at rich data set in 50 countries rather than merely looking at the CSRD made by companies in a single country. Most of past financial disclosure studies have been conducted in a single country setting. However, CSRD studies with data from only a single country evokes the potential for failure to link empirical results to the political, economy, national institutions or cultural characteristics of broader jurisdictional units (Adam et al. 1998; Williams 1999).
Further, multi-country sample allows for the introduction of country-specific effects as a significant institutional dimension (Aerts and Cormier 2006 p.302). Differences inThe different of the type of corporate governance systems (see for example Van der Laan Smith et al. 2005), the type of business systems (see for example Buhr and Freedman 2001; Chapple and Moon 2005), the type of legal system and level of enforcement (see for example Williams 1999; Buhr and freedman 2001; Holland and Foo 2003), and the level of economic development (see for example Buhr and Friedman 2001; Xiao et al. 2005) comprise a main source of variationsdifferences in jurisdictional context with potentially important ramifications on CSRD and overall corporate communication (Aerts and Cormier 2006).
Fourth, this thesis analyses all types of CSRD rather than just a single social or environmental disclosure item. Prior studies are oftengenerally limited only to very specific and limited environmental or social aspects. They usually have not well analysed the broader holistic areas of CSR., such as economic, human rights, labour practices and decent work, product responsibility and society aspects. This thesis utilises a different and more comprehensive measurement construct to close the gap and better investigate corporate communicationall aspects of CSR. By assesingusing all the types of CSRD, this thesis could better examine a broader set of values, issues, and processes that companies must address in order to best highlight their societal interactionsminimize any harm resulting from their activities and to create economic, social and environmental value (Ho and Taylor 2007 p. 124).
Finally, this thesis contributes to future research and development in social and environmental accounting disclosure by testing legitimacy theory. Legitimacy theory seeks to understand what factors may cause variability in CSRD and to what extent the variables of interest within an organization may influence organizational actions in seeking legitimacy (Haniffa and Cooke 2005). Past studies of CSRD have adopted a variety of perspectives to explain differences in CSRD, including agency theory (see for example Ness and Mirza 1991), political economy theory (see for example Williams 1999; Xiao et al. 2005), legitimacy theory (see for example Guthrie and Parker 1990; Patten 1991,1992, 2002; Lindblom 1994; Deegan and Rankin 1996; Deegan and Gordon 1996; Adam et al. 1998; Wilmshurst and Frost 2000; Campbell 2000, 2003; O'Dwyer 2002; O'Donovan 2002; Newson and Deegan 2002; Van Staden and Hooks 2007; Cho and Patten 2007; Islam and Deegan 2008; Aerts and Cormier 2009; Archel et al. 2009), institutional theory (see for example Aerts et al. 2006; Chen and Bouvain 2009), stakeholder theory (see for example Robert 1992; Van der Lan Smith et al. 2005; Eljido-Ten 2007). Deegan (2002) and, Islam and Deegan (2008) argue that legitimacy theory is widely used to explain social and environmental reporting. Moreover, tThey positargue that corporate annual report disclosure is best explained as a tool for maintaining legitimacy.
1.4 Assumptions and Limitations
This thesis has assumptions and limitations. There are sixfive assumptions. First, this thesis utilizes legitimacy theory as the foundation for its approach and is consequently limited by the theory itself. Other theories of corporate social responsibility disclosure such as stakeholder theory, may provide alternative approaches for understanding the effects studied. Second, there are many variables that could be used as proxies of firms characteristics and institutional factors may influence CSRD practices, that it is not at all possible to analyse all possible variants.
random sampling method. It is assumed that country and company selection is based on the data availability. Second, this thesis employs sample framework from the 2009 GRI lists report. Third, this thesis only focuses on stand-alone report published on and submitted to GRI websites. By focusing on stand-alone reports, it is assumed these document provide economic, environmental, and social informations and cover all the sustainability information. Fourth, it is assumed that the GRI lists comprehensively covers all major aspects of CSR. Fifth, this thesis assumes that 79 items used as checklist benchmark from GRI (2006) are voluntary in each juridiction. SixthFifth, this thesis focus only one period (2009) which is assumed to be representative for other time periods.as the current data.
This thesis is limited in several ways. First, since the disclosure index is developed based on the information disclosed in the stand-alone reports, it may reduce the number of companies that could be in thea sample. This is a limitation in that it it is likely that bigger firms will have stand-alone reports, therefore the sample may be biased towards larger firms. Some of companies still integrate financial informations with sustainability information in one annual report (KPMG 2008).
Third, this thesis employs a disclosure index to measure the extent of CSRD. It is assumed that each disclosure item is deemed equally important and therefore each item is awarded the same score when it is disclosed (Cooke 1991; Meek et al. 1995). Whilst this could be questioned, any other form of weighting is fraught with problems of subjectivity. Moreover, the scoring approach gives a '1' if an item is disclosed and '0' if not disclosed subject to the applicability of the item. This technique arguably loses the subtleties of different levels of disclosure of any item (Ho 2009 p. 205), but again is justified and employed because it reduces subjectivity.
These assumptions and limitations are common to most quantitative accounting disclosure studies. Despite these assumptions and limitations, it is argued that deep insights will be generated from this research approach.
1.5 Outline of the Thesis
This thesis comprises of eightnine chapters and is organized as follows: Chapter 1 providesis an introduction ofprovide the background to objectives of the thesis, research questions, significance of the thesis, assumptions and limitations, and outline of thesis. Chapter 2 contains the literature review of global corporate social responsibility disclosure (CSRD), Global Reporting Initiative (GRI) and theoretical framework of CSRD. Chapter 3 describes past studies of CSRD, determinants of CSRD, and the hypotheses development. Chapter 4 discusses the research approach and research method. Of particular emphasis is the approaches in regards to data collection, sample and sampling, measuring variables, model specification, and statistical testing. Chapter 5 shows the results of hypotheses testing. Chapter 56 reports the descriptive statistics and univariate analysisy. Chapter 67 presents the multivariate analysis in regards to findings of the relationships between corporate social responsibility disclosure and predictor variables, results of hypotheses testing, and sensitivity tests. Chapter 78 discusses the implications of findingssensitivity test. Lastly, Chapter 89 summaries the conclusionfindings and limitations of this study, and directions for future study.