Does it Pay to be Socially Responsible? Comparative Evidence from a Developing Country

The purpose of this research is to examine the changes in the relationship between institutional investment (II) and corporate social performance (CSP) of the public listed companies in Bangladesh between 2008 and 2012. A sample of 152 listed companies from the Dhaka Stock Exchange (DSE) was used and information was derived from knowledge-based questionnaires, annual reports, various websites, newspaper articles, government and industry-based regulations and policies, and CSR reports. The data collected are used to measure the CSP index patented by Ahmed, Islam, Mahtab and Hasan (2012). Moreover, statistical analyses (i.e., correlation and regression) are performed to examine relationship between II and CSP where industry, leverage, profitability and size were considered as control variables in the study. This article ascertained that II has increased slightly from an average of 13.73 per cent in 2008 to 14.94 per cent in 2012. The values of CSP also improved from a mean of –52.30 to –13.71 during the same period. Despite these positive changes, the findings from this study show that though a positive relationship between II and CSP exists in Bangladesh, it is still not significant. This article revealed that new regulations did have a positive impact in the levels of CSP in the public listed companies in Bangladesh.