Abstract
Purpose: This study investigates the relationship between the quality of Corporate Social Responsibility (CSR) disclosure and corporate financial performance (CFP) in emerging markets. While the CSR-CFP link has been extensively studied, results remain equivocal. This paper posits that the quality, rather than the mere volume, of CSR disclosure is a critical, yet underexplored, determinant of financial returns, particularly within the unique institutional context of emerging economies. Design/methodology/approach: A quantitative approach using panel data from 250 publicly listed non-financial firms across five major emerging markets for the period 2018–2023. CSR disclosure quality is measured using a comprehensive index developed through content analysis of corporate annual and sustainability reports, assessing dimensions of credibility, relevance, scope, and timeliness. Firm financial performance is measured using both accounting-based (Return on Assets, ROA) and market-based (Tobin's Q) metrics. Panel data regression models with firm fixed effects are employed to test the hypotheses. Findings: The empirical results demonstrate a statistically significant and positive relationship between the quality of CSR disclosure and both ROA and Tobin’s Q. This suggests that firms with higher-quality CSR disclosures experience superior financial performance. The findings hold after controlling for firm size, leverage, age, and industry effects. The results indicate that stakeholders in emerging markets reward firms for transparent, credible, and comprehensive information regarding their social and environmental activities. Originality/value: This research contributes to the literature by moving beyond the quantity of CSR disclosure to focus on its quality. By constructing a multi-dimensional quality index, this study provides a more nuanced understanding of the mechanisms through which CSR reporting impacts firm value in emerging markets. The findings offer practical insights for managers on optimizing CSR communication strategies and for investors on incorporating disclosure quality into their valuation models.