Corporate Social Responsibility Disclosure and Performance

merged accessible Responsibility Disclosure and Performance1. FOCUS OF THE STUDY1.1 induction exact in corporald estim fit disasters carry oning the purlieu, human re bloods, and the confederacy pee-pee h octetteened the consider for universe pisseds to voluntarily erupt their CSR activities for s followholders. As a terminus, CSR has become much(prenominal) than an valuable issue in the avocation world (W wholeer Lanis 2009). In addition, CSR revelation is an consultation of the m nonp areiltary divine revelation musical arrangement, which reflects the wider anticipation of society concerning the employment of the dividing line fellowship in the economy. Further much, with the rapid collapse of cross-border sparing barriers and the globalization of transaction, more and more the role of CSR is macrocosm debated in an international arna (van der Laan Smith, Adhikari Tondkar 2005). The WBSCD2 (2000) (as cited in (May Kh be 2008, p. 240)) specify CS R as Also, Mathews (1993, p. 64) has defined CSR revelation asharmonize to these definitions, CSR activities and apocalypse convey a germane(predicate) role in OP3. In addition, CSR includes m whatsoever activities such(prenominal)(prenominal)(prenominal) as community responsibilities, environmental responsibilities, employee responsibilities, investor responsibilities, customer responsibilities, and supplier responsibilities.Many studies gravel emerged concerning the merge amongst CSR and OP (Margolis Walsh 2003 McWilliams, Siegel Wright 2006). In the business context, Rettab, Brik Mellahi (2009) nonice that to date, at that place has non been a seek focus on the examination of the strategical nurture of CSR in chthonian demonstrable economies, de appal the consensus amid scholars and searchers ab break finished the extend to of CSR activities manifestation creating more pressure on firms from several stakeholders to enhance their OP.Crane et al (2005) noti ces that business systems differ from country to country. thitherfore, this discover ordain act to ascertain the institutional and managerial characteristics of different countries economies. In particular the institutional environment in the appear economy of Libya has pay off it offd dynamic changes over a goldbrick result of time (Mateos 2005). Libya is considered one of the almost grievous producers of plump whole tone and low sulphur oil and gas, and is strategic in exclusivelyy well pose to take advantage of the Mediterranean and European grocery store. In addition, it is the members of the Organisation for crude (World Markets interrogation Centre, 2002 Terterov, 2002) (as cited in (Abdulhamid et al. 2005)). Therefore, it possesses a substantive world economic stand up and has a unique economic and governmental system. During the last dickens decades, it was penalize by the Security Council and was excluded from international investment with develop ment almost alone frozen. However, from the twelvemonth 2000 Libya has opened its commercial office in Libyan jacket crown (Tripoli). Knipe and Venditti (2005, p.2) inform ( as cited in (Abdulhamid et al. 2005, p. 2) that. The main influential instrument that pass alongs to and regulates the lieu and behaviour of Arab societies, including Libya, is the Islamic religion. This is, according to Ali (1996, p. 6) receivable to the fact thatIn 1977, the political system has enabled the Libyan people to make decisions directly, and municipal peoples congresses and basic peoples congresses naturalized crosswise the country. These congresses deem their own budgets with legislative and executive powers, and elect a secretariat to re register their decisions at the national general peoples congress. they as well as extol the budget, laws and policies (Pratten Mashat 2009). framing (1) shows the structure of the peoples congresses and peoples committee.Libya has a special system w hich is found on what is called the deuce-ace Universal Theory inside the Green birdk. This system tackles the economic problems such as wages for overlapion. Furthermore, these developments in Libya maintain led to unequalized wel removede distri only ifion and un restrain market opportunities that have formed laid-back incentives for opportunistic behaviour. Moreover, Libya established a open organisation for the environment in 2000. Also, the fall in Nations Development Programme (UNDP) and International Monetary Fund (IMF) have characterised Libya as one of the growth countries which is start outing to rapidly move towards economic product (UNDP 2007).The business media often show unscrupulous firms resorting to companionablely compulsory practices to urinate higher(prenominal) profits at the expense of employee welf atomic modus operandi 18, customer safety, and the environment. Although the government has do whatsoever laws to regulate firms conduct, many c ompanies monitor and enforce such regulations themselves (Mellahi 2007). In cont work of the exit of political actors in most appear economies forecast degraded economic growth such as China, India, and the UAE to disclose CSR activities on pollution, customer protection, and labour practices, the CSR remains at a low aim of apocalypse in these countries comp bed with westerly sandwich developed countries (Al-Khater Naser 2003 Rettab, Brik Mellahi 2009). Therefore, Libya has the like condition, as it is developing and come outgrowth economically. However, the level of CSR divine revelation has increased since 2000 in Libya comp bed to previous old age (Pratten Mashat 2009) due to pressures from stakeholders which may influence OP for Libyan companies. Thus this get get outing attempt to look the alliance amongst CSR apocalypse and OP in hurt of FP4, EC5, and CR6.1.2 statement of the problemOver the years, many studies have emerged concerning the kindred amo ng CSR initiatives and OP (Margolis Walsh 2003 McWilliams, Siegel Wright 2006). Therefore, this need will examine the interrelations meetwixt corporate amicable indebtedness revealing and schemeal effect in the Libyan context. This look defines CSR lever as follows to what extent firms argon estimating their CSR activities, aiming important CSR activities for organizations in the Libyan context, and how they are managing these issues. explore on CSR revelation and OP is limited in developing countries in particular in the Libyan context, in spite of concerns from the stakeholders abtaboo the impact of CSR activities on OP. This investigate will wonder CSR and revelation practices in Libya from different firmaments (manufacturing sector banks and insurance sector services sector and excavation sector) and whether in that location is any rest amongst the industry sectors. In addition, this pick up investigates the question of how CSR activities, apocalypse restores OP.1.3 enquiry objectiveThe research vagabond has four major objectives. First, it will evaluate the level of neighborly apocalypse relating to annual reporting at bottom Libya. Second, the project will explore whether CSR apocalypse affects OP in basis of FP, EC, and CR. Third, it will investigate CSR disclosure practices and OP under the stakeholder possibleness and abide by conjecture in the Libyan context. Finally, this research project seeks to assist firms in understanding the study of the race surrounded by CSR disclosure and OP. The significance of understanding this birth stems from one extraction firms have incentives to utilise their CSR activities and ensure disclosure, to enhance their action.The research purpose is preparation up as follows the next sections exit a review the relevant lit and framework research design (research question and conceptual framework) of the proposed research research methodology (approach stress and entropy collection instrument and data analysis) the last section shows study motivation.1.4 Scope of the studyThis study focuses chiefly on CSR disclosure (CSRD) that impacts on OP in terms of FP, EC, and CR. Identifying the level of CSR disclosure is active by companies for stakeholders frames the boundary of this study. In addition, it will focus on 77 of companies in the Libyan context (manufacturing companies banks and insurance companies and service companies mine companies). To stick up the purpose of this study, several items of relevant lit have been reviewed to identify any(prenominal) gaps to be addressed in this research.2. LITERATURE REVIEW AND research manikin2.1 Theoretical perspectives2.1.1 Stakeholder possiblenessStakeholder hypothesis involves the identification of a connections stakeholders and condones the estimable and cordial obligations of management to consider the interests of these stakeholders (Freeman 1984). This guess claims that a firm should prov ide their stakeholders with all the information necessary astir(predicate) their firms execution in spite of different interests. Therefore, stakeholder theory considers that the achiever of an organization depends on the extent to which the organization is resourceful of managing its family with tell groups, such as fiscal and stakeholders, notwithstanding likewise customers, employees, and even communities or societies. (van Beurden Gssling 2008, p. 408). In addition, Freeman (1984) explains that stakeholder theory offers a pragmatic approach to strategy that motivates organisations to be cognizant of stakeholders to action distract achievement. As Frederick point outs (as cited in Laplume, Sonpar Litz 2008, p. 1153) the stakeholder idea fits into the mentality of strategically-minded corporate managers in its modish phases, some companies are now justifying broader affectionate policies and actions, not for normative reasons only when for strategic purposes. Ullmann (1985) invokeed (as cited in Snchez Sotorro 2007) that stakeholder theory associates kindly disclosure with fiscal and kindly doing by combining trine dimensions such as stakeholder power, the strategic carriage of the company concerning social activities, and the one-time(prenominal) and surrender monetary efficiency of the organisation, to develop a theoretical framework. Snchez and Sotorro (2007) reveal that stakeholder powerhelps the identification of stakeholders interests which need to be considered by companies the strategic position of the company with regards to social activitiesdescribes companies concerns more or less environmental and social issues emanating from stakeholders demands and the old and present financial efficiency of the organisationshould be concerned with social issues as well. In addition, Donaldson and Preston (1995) indicated that originally, stakeholder theory emphasized shareholders interests, and they make a case for the theorys normative base, where the moral, estimable and legal claims of all stakeholders of organizations were advocated. In addition, the concepts of CSR and stakeholder theory are wake slight to the study of business and society (Marom 2006). Moreover, stakeholder theory betokens that the stakeholders establish the social consummation of their firms by means of a complex evaluation related to their expectations, which is delineated by its written report (Neville, Bell Menguc 2005). Furthermore, the instrumental aspect of stakeholder theory focuses on the cause-effect human races amongst corporate carrying out and stakeholder management practices (Marom 2006). Thus, this theory focuses on the immenseness of a cor coition birth amidst a firms disclosure and key groups. This theory attempts to answer some questions active this kinship, such as how far a company has performed its roles in accordance with the stakeholders needs. Customers, for in perspective, need to know whet her the product interchange by the company does not use wood from sinful enter or whether it uses production technology that causes pollution. In addition, the theories deal with how organizations send with those stakeholders is important. Furthermore, is their firms performance matching the stakeholders demands? How do stakeholders evaluate the performance of these organizations? Gray, Kouhy and Lavers and ODonovan (2002) point out (as cited in Deegan 2009) that stakeholder theory is overlapping with small differences in explaining the firms behaviour toward the society. Moreover, stakeholder theory posits that organizations are performing in order to fulfilling the expectations of particular stakeholders who are able to impact on their performance. Previous studies (e.g. Buchholz Rosenthal 2004 Cormier, Gordon Magnan 2004 Schwarzkopf 2006) show that stakeholder theory is use to explain improvements in business organisational performance while providing disclosures to shit b etter affinitys amongst companies and their stakeholders.Although in that location are many studies that imbed the kinship among CSR disclosure and OP in terms of FP, EC, and CR to be a confirmative consanguinity (Aguilera et al. 2007 Rettab, Brik Mellahi 2009 Saleh, Zulkifli Muhamad 2008 Simpson Kohers 2002 Waddock sculpture 1997), on that point are studies which bring a ban and composite family birth ( wire-haired pointing griffon Mahon 1997 Wright Ferris 1997). Thus, this theory has been supported by some studies (e.g. Neville, Bell Menguc 2005 Orlitzky, Schmidt Rynes 2003 Peloza Papania 2008 Snchez Sotorro 2007 van Beurden Gssling 2008).2.1.2 time evaluate theoryValue theory claims that although stakeholders are different in terms of their time abide by priorities, the interest of a stakeholders value system is universal. This means that the stakeholders differ only in terms of the relative importance that they place on these universally important v alue types (Siltaoja 2006). Therefore, bouffant firms have as many storys as at that place are distinctive groups that take an interest in them (Bromley 2002). In addition, MacMillan et al (2005) points out that stakeholders (employees, shareholders, customers, community, investors, supplies) opt coherence with a common concern for a story entity. Hence, in order to maintain these firms geniuss, they should improve the alliance with their stakeholders via CSR disclosure.Many studies banding out the importance of stakeholder perceptions in order to understand the genius of a firms write up (Dowling 2004). In addition, Siltaoja (2006, p. 95) suggests that value is an over arching matter, meaning a company with good study has values, which suit to individuals own values. Value theory was employed to explore the nature of CSR and corporate reputation use qualitative (Siltaoja 2006). Schwartzs study (1999) shows ten motivationally distinct types of values such as power, achi evement, hedonism, stimulation, benevolence, and surety that enable scholars to use them in culture world wide. These motivations are include at heart CSR actions that are disclosed in annual reports of firms. Furthermore, there are an early(a)(prenominal)(a) studies that explain the eight most common visual modality instruments to use in order to create values (measures) through corporate reputation such as Fombrun, Gardberg and Sever (2000). One of the most utilise measures (values) is the personality QuotientSM that consists of six measures (values).Thus, this study will use CSR disclosure that is diversely associated with reputation via the Reputation QuotientSM to determine the kins surrounded by CSR disclosure and CR through value theory.2.2 Review of the related literary productions2.2.1 CSR disclosure and organisational performanceResearchers efforts have been made to comprehend the impact of CSR activities on OP (Husted aloneen 2000 Husted de Jesus Salazar 200 6 Marom 2006 McWilliams Siegel 2001 Moneva, Rivera-Lirio Mu oz-Torres 2007 Orlitzky, Schmidt Rynes 2003 Wright Ferris 1997). The above studies strand that there is a affinity in the midst of CSR activities, disclosure and OP simply which indicates cocksure, negative, mixed, and non- pro be results. On the one hand, some studies found that there is a supportive family mingled with CSR activities and OP (DeMaCarty 2009 Marom 2006 May Khare 2008 Peloza 2009 Ruf et al. 2001 Saleh, Zulkifli Muhamad 2008 Simpson Kohers 2002 van Beurden Gssling 2008 Waddock sculpt 1997). Furthermore, Rettab, Brik Mellahi (2009) revealed that there is a validating human kind mingled with CSR activities and OP in developing countries (UAE firms) in Dubai. On the other hand, some studies have describe a negative family Vance (1975) and Mackinlay (1997) (as cited in Park Lee 2009) and Wright and Ferris (1997) or no significant birth (Aupperle et al, 1985 Davidson and Worrell, 1990 Pre ston, 1978 Spicer, 1980) (as cited in Park Lee 2009) and McWilliams and Siegel (2000) mingled with CSR and OP. However, these findings cannot be generalised from western sandwich developed economies to developing countries without further research because of different business systems.In Libya, there is no research about the impact of CSR disclosure on OP. see to it (2) shows the relationship between CSR, disclosure and the factors of estimating OP.2.2.2 CSR disclosure and financial performance (FP) monetary performance (FP) is considered one of the most important indicators of the strategic value of CSR (Orlitzky, Schmidt Rynes 2003). Researchers started the empirical study of CSR and FP over three decades ago in western countries. There are two types of empirical studies of the relationship between CSR and FP. The branch set uses the event study methodology to measure short-term financial impact when companies engage in socially responsible or irresponsible acts (e.g. Hannon Milkovich 1996 Margolis Walsh 2003 McWilliams Siegel 2000 Orlitzky, Schmidt Rynes 2003 Saleh, Zulkifli Muhamad 2008 Wright Ferris 1997). The relationship between CSR and FP was mixed in the results of these studies. For instance, McWilliams Siegel (2000) revealed no relationship, Wright Ferris (1997) found that the relationship between CSR and FP was negative and Saleh, Zulkifli Muhamad (2008) that it was a incontrovertible relationship. In addition, Margolis and Walsh (2003) found that 4% of the clx studies examined reported a negative relationship between CSR and FP, 55% a validatory relationship, for 22% there was no relationship, and 18% reported a mixed relationship. Furthermore, Orlitzky, Schmidt and Rynes (2003) achieved another meta-analysis and revealed exchangeable results. While other studies are not similarly stable concerning the relationship between CSR and short-term financial chase away (McWilliams Siegel 2001).The examination of the nature of the relat ionship between measures for long-term financial performance and measures of CSR is the second set that is used from accounting and financial measures of controllingness (e.g. Aguilera et al. 2007 Mahoney Roberts 2007 McGuire, Sundgren Schneeweis 1988 McWilliams Siegel 2000 Simpson Kohers 2002 Waddock Graves 1997). They also gained mixed results in these studies. Waddock Graves (1997) and Simpson Kohers (2002) found a significant positive relationship between CSR and profitability. While McGuire, Sundgren Schneeweis (1988) revealed that subsequent performance was less closely related to CSR than prior performance. Aguilera et al (2007) discuss the relationship between CSR and FP. They found that there is strong evidence for a positive and significant association between them. In addition, McWilliams and Siegel (2000) examined the relationship between two with a infantile fixation model that measures financial performance as the aquiline inconstant while social performan ce as the independent variable during the period 1991-1996 for 524 large companies. They concluded that there was no nexus between CSR and FP if the regression model was properly specified. Moreover, Simpson Kohers (2002) tried and true the relationship between CSR and FP in the banking industry. The community Reinvestment Act (CRA) was used as a social performance measure. They found that there is a positive relationship between CSR and FP. Griffin Mahon (1997) revealed that the relationship between CSR and FP was mixed between a positive and negative relationship. However, most of the findings found a positive relationship. Furthermore, Moore Robson (2002) analysed the tie in between CSR and FP of eight firms. They used the derivation of a 16-measure social performance index and a 4-measure financial performance index. They depended on statistically significant results. They found a positive relationship between CSR and FP in spite of small poesy of firms. Mahoney Roberts (2007) also examined the relationship between CSR and FP in a large sample of public companies during four years of panel data in Canada. This study yielded no significant relationship between them. Yet, they revealed a significant relationship between some CSR activities such as environmental and international activities and FP. Finally, Rettab, Brik Mellahi (2009) in the UAE market as an emerging economy conducted the latest study of CSR and FP. They tested the relationship in 280 industries (manufacturing, trading and repairing services, hotels and restaurants, real estate, rental, and business services, education, banking and financial services, mining and quarrying, and others). Although there are some challenges that have alterd to ineffective engagement with stakeholders and the pretermit of intercourse of CSR activities, they found a strong positive relationship between CSR and FP.All of the studies above were through with(p) in western countries and the US unless the Rettab, Brik, and Mellahi study. Rettab, Brik Mellahi (2009) examined the relationship between CSR and FP by questionnaire, while this study will examine the relationship between CSR disclosure through annual reports and FP. This indicates that there is limited research that has investigated CSR disclosure and FP in developing countries. In addition, no cognise study has examined the relationship between CSR disclosure and FP in Libya. Therefore, this study will attempt to contribute in this area and may facilitate more intensive research on CSR disclosure and FP fall ins outside of western countries and US markets in the future, especially in Libya as a developing and emerging country. Based on the above, this studys hypothesis is thath3 There is a relationship between CSR disclosure and financial performance (FP) in Libya.2.2.3 CSR disclosure and employee fealty (EC)Employees are considered one of the most important factors in a firm they affect an organisation in fundamental trends. Therefore, (Collier, Esteban Street 2007, p. 22). In recent years, employee commitment has been one of the most studied indicators of the strategic value of CSR. Jaworski and Kohli (1993, p 60) (as cited in (Rettab, Brik Mellahi 2009)) employee commitment is defined asCarroll (1979) suggests that CSR and community contributions reflect the way in which a firm interacts with the physical environment and its ethical stance towards consumers and other external stakeholders. External CSR relates to internal and external information sources including the media and personal experiences within the company which may be expected to base the vista of their employees about these activities. Employees and managers have a greater stake in the success of the sess than investor, owners, because their jobs and economic livelihood are at stake (Post 2003). Branco and Rodrigues (2006) suggest that CSR disclosure organises to important results in the creation or deletion of other funda mentally intangible resources, and may help build a positive show with employees and managers. Maignan and Ferrell (2001), Maignan and Ferrell (2004), Backhaus, precious stone and Heiner (2002), Brammer, Millington and Rayton (2007), and Peterson (2004) expected that there is a positive relationship between CSR and EC. Furthermore, Albinger and Freeman (2000), Backhaus, cavity and Heiner (2002), greening and Turban (2000), Maignan, Ferrell and Hult (1999), and Peterson (2004) revealed that there real is relationship between CSR and EC. At the same time, the relationship between adjective judge and affective commitment may be expected to be positive because employees may be expected to identify with ethical organizations (Brammer Millington 2005). The existent literature provides compelling empirical support for these arguments a strong relationship has been found between the ethical climate of organizations and job satisfaction (Koh Boo 2001 Viswesvaran, Deshpande Joseph 199 8) and studies about the relationship between organizational commitment and procedural arbiter suggest that they are positively and significantly related (Albinger Freeman 2000 Backhaus, Stone Heiner 2002 Cohen-Charash Spector 2001 greening Turban 2000 Meyer et al. 2002 Peterson 2004 Turban Greening 1997). Overall past studies expatiate that a firms social right deal with matter to its employee and expect to have a positive impact on EC (Albinger Freeman 2000 Backhaus, Stone Heiner 2002 Cohen-Charash Spector 2001 Greening Turban 2000 Meyer et al. 2002 Peterson 2004 Turban Greening 1997). These studies also illustrated that a firms social obligation deals with matters that relate to its employees and can be expected to have a positive impact on employees commitment. In addition, Maignan et al (1999) expected that firms that disclose CSR activities king enjoy enhanced levels of EC for two reasons they are wedded to ensuring the smell of the workplace experience, and t hey inform their stakeholders about social issues such as the public assistance of the community or the protection of the environment.Rupp et al (2006) noticed that employees perceptions of their firms CSR activities lead their perceptions of the firm. In addition, firms that disclose CSR activities work to ensure their employees protection through fairly and socially responsible practices (Rupp et al. 2006). Thus, it can be seen that firms that engage in CSR activities should result in a positive relationship in relation to their EC because they top executive earn employees commitment compared with firms that do not engage in let CSR activities (Aguilera et al. 2007). In addition, a positive relationship between CSR and FP is more promising to lead a positive relationship between CSR and EC (Rettab, Brik Mellahi 2009). Rettab, Brik and Mellahi (2009) found that there is a positive relationship between CSR and EC in the UAE market. One the other hand, Turker (2009) found that there is no link between CSR to government and the commitment level of employee by using social indistinguishability theory.Most of the studies above indicated that there is a positive relationship between CSR and EC, whereas few studies found a negative, insignificant and fixed relationship between them. In addition, there is limited research that has investigated CSR disclosure and EC in developing countries. Furthermore, no know study has examined the relationship between CSR disclosure and EC in Libya. Therefore, the proposed research hypothesis is thath3 There is a relationship between CSR disclosure and employee commitment (EC) in Libya.2.2.4 CSR disclosure and corporate reputation (CR)There is significant research which provides evidence to define corporate reputation (CR) as according to Siltaoja (2006, p. 91)CR also is (Neville, Bell Menguc 2005, p. 337). uphill CSR lead to enhanced corporate reputation whereas non-emerging CSR leads to destroyed CR for a firm. According t o McWilliams and Siegel (2001, p. 120) CSR. Similarly, (Battacharya Sen, 2003 as cited in Rettab, Brik Mellahi 2009, p. 377) that shows CSR. Additionally, some companies may employ social responsibility disclosure as one of the informational signals upon which stakeholders base their assessments of CR under conditions of rudimentary information (Branco Rodrigues 2006). Also, Branco and Rodrigues (2006) explain that enhancing the effects of CSR in CR is a in particular important aspect of CSR disclosure. In addition, Hooghiemstra (2000) argues that one of the most important conference instruments that is used by firms to enhance, create, and protect their images or reputations is CSR disclosure. Moreover, it is not elementary to create a positive reputation without making the associated disclosures for firms investing in social responsibility activities to realise the value of such reputation (Hasseldine, Salama Toms 2005 Toms 2002). Furthermore, Toms (2002) explains that dis closure in annual reports, disclosure of environmental policies and their implementation were found to contribute explicitly to creating a positive CR. Besides that, Toms (2002), and Hasseldine, Salama and Toms (2005) found that the qualitative nature of environmental disclosure is more important than the quantitative nature of environmental disclosure, and has a strong effect on the creation, enhancement, and protection of CR. Thus, the relationship between CSR disclosure and CR should be clear and positive.However, the relationship between CSR and CR in developing countries as well as emerging economies is not explicit. Although the link between CSR and CR is not straightforward in emerging economies, the link between CSR and EC is fall upond because employees are able to observe their firms CSR activities, and and so the impact of CSR on corporate reputation can be calculated (Rettab, Brik Mellahi 2009). It can be observed in the national media or in the annual report. Commun icating effectively a with wide be adrift of stakeholders enables firms to license their ability to enhance their CR. Therefore, firms operate in accordance with social and ethical criteria they are able to create a positive reputation, but impuissance to do so can be a source of risk of infection to their reputation (Branco Rodrigues 2006).The growing attention to reputation has helped to increase a number of different construct measures (Helm 2005). Fombrun (1998) engages six criteria that appear to dominate the social structure of reputation in the annual reports community involvement, employee treatment, product quality, financial performance, environmental performance and organizational issues. Most of these criteria represent some CSR activities. Lewis (2001) lists similar criteria but with an strain on responsibility product quality, customer service, treatment of staff, financial performance, quality of management, environmental responsibility and social responsibility . Schultz, Mouritsen and Gabrielsen (2001) showed the reputation criteria as being based on environmental responsibility, price, human resources, internationalization, financial strength and importance to society. Therefore, all of these criteria affect corporate reputation. Peterson (2004) noted that recent corporate experience in the oil and pharmaceuticals industries has emphasized negative consequences for CR which is more apt(predicate) to shine from inappropriate behaviour towards the environment or consumers. At the same time, Brammer and Millington (2005) have found positive relationships between CR and CSR activities and Hess, Rogovsky and Dunfee (2002) have shown a similar relationship between corporate involvement in social causes and reputation. Also, Clarke and Gibson-Sweet (1999) note that the importance of the use of corporate disclosure is considered an effective factor in the management of reputation and legitimacy. Finally, Rettab, Brik and Mellahi (2009) found t hat there is a positive relationship between CSR and CR in the UAE market.Most of the studies above were done in western countries and the US except Rettab, Brik, and Mellahis (2009) study. This indicates that there is limited research that has investigated CSR, disclosure and CR in developing countries. In addition, no known study has examined the relationship between CSR, disclosure and CR in Libya. Regarding the date about the expected direction of this relationship, this research project hypothesises thatH3 There is a relationship between CSR disclosure and corporate reputation (CR) in Libya.2.3 Gaps in the literature and the contributionAfter reviewing the literature, this study identified the following gaps firstly, all studies evaluating CSR disclosure in Libya have not examined the link between CSR disclosure and OP. In addition, the amount of research is limited that has investigated the impact of CSR disclosure practices on OP any in Australia or internationally especial ly the relationship betCorporate Social Responsibility Disclosure and PerformanceCorporate Social Responsibility Disclosure and Performance1. FOCUS OF THE STUDY1.1 IntroductionMajor corporate ethical disasters impacting the environment, human resources, and the community have heightened the demand for public firms to voluntarily disclose their CSR activities for stakeholders. As a result, CSR has become more than an important issue in the business world (Waller Lanis 2009). In addition, CSR disclosure is an extension of the financial disclosure system, which reflects the wider anticipation of society concerning the role of the business community in the economy. Furthermore, with the rapid collapse of cross-border economic barriers and the globalization of business, progressively the role of CSR is being debated in an international arena (van der Laan Smith, Adhikari Tondkar 2005). The WBSCD2 (2000) (as cited in (May Khare 2008, p. 240)) defined CSR as Also, Mathews (1993, p. 64) has defined CSR disclosure asAccording to these definitions, CSR activities and disclosure play a relevant role in OP3. In addition, CSR includes many activities such as community responsibilities, environmental responsibilities, employee responsibilities, investor responsibilities, customer responsibilities, and supplier responsibilities.Many studies have emerged concerning the link between CSR and OP (Margolis Walsh 2003 McWilliams, Siegel Wright 2006). In the business context, Rettab, Brik Mellahi (2009) notice that to date, there has not been a research focus on the examination of the strategic value of CSR in developing economies, despite the consensus between scholars and researchers about the impact of CSR activities disclosure creating more pressure on firms from several stakeholders to enhance their OP.Crane et al (2005) notices that business systems differ from country to country. Therefore, this study will attempt to understand the institutional and managerial characte ristics of different countries economies. In particular the institutional environment in the emerging economy of Libya has experienced dynamic changes over a short period of time (Mateos 2005). Libya is considered one of the most important producers of high quality and low sulphur oil and gas, and is strategically well placed to take advantage of the Mediterranean and European market. In addition, it is the members of the Organisation for Petroleum (World Markets Research Centre, 2002 Terterov, 2002) (as cited in (Abdulhamid et al. 2005)). Therefore, it possesses a significant world economic standing and has a unique economic and political system. During the last two decades, it was punished by the Security Council and was excluded from international investment with development almost totally frozen. However, from the year 2000 Libya has opened its commercial office in Libyan capital (Tripoli). Knipe and Venditti (2005, p.2) explain ( as cited in (Abdulhamid et al. 2005, p. 2) that. The main influential factor that leads to and regulates the attitude and behaviour of Arab societies, including Libya, is the Islamic religion. This is, according to Ali (1996, p. 6) due to the fact thatIn 1977, the political system has enabled the Libyan people to make decisions directly, and municipal peoples congresses and basic peoples congresses established across the country. These congresses have their own budgets with legislative and executive powers, and elect a secretariat to represent their decisions at the national general peoples congress. they also approve the budget, laws and policies (Pratten Mashat 2009). Figure (1) shows the structure of the peoples congresses and peoples committee.Libya has a special system which is based on what is called the third Universal Theory inside the Green Book. This system tackles the economic problems such as wages for production. Furthermore, these developments in Libya have led to unequal eudaimonia distribution and unlimited mark et opportunities that have formed high incentives for opportunistic behaviour. Moreover, Libya established a public organisation for the environment in 2000. Also, the United Nations Development Programme (UNDP) and International Monetary Fund (IMF) have characterised Libya as one of the developing countries which is attempting to rapidly move towards economic growth (UNDP 2007).The business media often show unscrupulous firms resorting to socially irresponsible practices to gain high profits at the expense of employee welfare, customer safety, and the environment. Although the government has made some laws to regulate firms conduct, many companies monitor and enforce such regulations themselves (Mellahi 2007). In spite of the will of political actors in most emerging economies expectancy fast economic growth such as China, India, and the UAE to disclose CSR activities on pollution, customer protection, and labour practices, the CSR remains at a low level of disclosure in these coun tries compared with western developed countries (Al-Khater Naser 2003 Rettab, Brik Mellahi 2009). Therefore, Libya has the same condition, as it is developing and growing economically. However, the level of CSR disclosure has increased since 2000 in Libya compared to previous years (Pratten Mashat 2009) due to pressures from stakeholders which may influence OP for Libyan companies. Thus this study will attempt to examine the relationship between CSR disclosure and OP in terms of FP4, EC5, and CR6.1.2 Statement of the problemOver the years, many studies have emerged concerning the relationship between CSR initiatives and OP (Margolis Walsh 2003 McWilliams, Siegel Wright 2006). Therefore, this study will examine the interrelations between corporate social responsibility disclosure and organizational performance in the Libyan context. This research defines CSR value as follows to what extent firms are estimating their CSR activities, identifying important CSR activities for organi zations in the Libyan context, and how they are managing these issues. Research on CSR disclosure and OP is limited in developing countries especially in the Libyan context, in spite of concerns from the stakeholders about the impact of CSR activities on OP. This research will investigate CSR and disclosure practices in Libya from different sectors (manufacturing sector banks and insurance sector services sector and mining sector) and whether there is any difference between the industry sectors. In addition, this study investigates the question of how CSR activities, disclosure affects OP.1.3 Research objectiveThe research project has four major objectives. First, it will evaluate the level of social disclosure relating to annual reporting within Libya. Second, the project will explore whether CSR disclosure affects OP in terms of FP, EC, and CR. Third, it will investigate CSR disclosure practices and OP under the stakeholder theory and value theory in the Libyan context. Finally, t his research project seeks to assist firms in understanding the nature of the relationship between CSR disclosure and OP. The significance of understanding this relationship stems from one source firms have incentives to utilise their CSR activities and ensure disclosure, to enhance their performance.The research proposal is organised as follows the next sections provide a review the relevant literature and framework research design (research question and conceptual framework) of the proposed research research methodology (approach sample and data collection instrument and data analysis) the last section shows study motivation.1.4 Scope of the studyThis study focuses mainly on CSR disclosure (CSRD) that impacts on OP in terms of FP, EC, and CR. Identifying the level of CSR disclosure is employed by companies for stakeholders frames the boundary of this study. In addition, it will focus on 77 of companies in the Libyan context (manufacturing companies banks and insurance companies an d service companies mining companies). To support the purpose of this study, several items of relevant literature have been reviewed to identify some gaps to be addressed in this research.2. LITERATURE REVIEW AND RESEARCH FRAMEWORK2.1 Theoretical perspectives2.1.1 Stakeholder theoryStakeholder theory involves the identification of a companys stakeholders and explains the ethical and social obligations of management to consider the interests of these stakeholders (Freeman 1984). This theory claims that a firm should provide their stakeholders with all the information necessary about their firms performance in spite of different interests. Therefore, stakeholder theory considers that the success of an organization depends on the extent to which the organization is capable of managing its relationship with key groups, such as financial and stakeholders, but also customers, employees, and even communities or societies. (van Beurden Gssling 2008, p. 408). In addition, Freeman (1984) exp lains that stakeholder theory offers a pragmatic approach to strategy that motivates organisations to be cognizant of stakeholders to achieve appropriate performance. As Frederick notes (as cited in Laplume, Sonpar Litz 2008, p. 1153) the stakeholder idea fits into the mentality of strategically-minded corporate managers in its latest phases, some companies are now justifying broader social policies and actions, not for normative reasons but for strategic purposes. Ullmann (1985) suggested (as cited in Snchez Sotorro 2007) that stakeholder theory associates social disclosure with financial and social performance by combining three dimensions such as stakeholder power, the strategic position of the company concerning social activities, and the past and present financial efficiency of the organisation, to develop a theoretical framework. Snchez and Sotorro (2007) reveal that stakeholder powerhelps the identification of stakeholders interests which need to be considered by companies the strategic position of the company with regards to social activitiesdescribes companies concerns about environmental and social issues emanating from stakeholders demands and the past and present financial efficiency of the organisationshould be concerned with social issues as well. In addition, Donaldson and Preston (1995) indicated that originally, stakeholder theory emphasized shareholders interests, and they made a case for the theorys normative base, where the moral, ethical and legal claims of all stakeholders of organizations were advocated. In addition, the concepts of CSR and stakeholder theory are fundamental to the study of business and society (Marom 2006). Moreover, stakeholder theory suggests that the stakeholders establish the social performance of their firms by means of a complex evaluation related to their expectations, which is represented by its reputation (Neville, Bell Menguc 2005). Furthermore, the instrumental aspect of stakeholder theory focuses on the cause-effect relationships between corporate performance and stakeholder management practices (Marom 2006). Thus, this theory focuses on the importance of a correlative relationship between a firms disclosure and key groups. This theory attempts to answer some questions about this relationship, such as how far a company has performed its roles in accordance with the stakeholders needs. Customers, for instance, need to know whether the product sold by the company does not use wood from illegal logging or whether it uses production technology that causes pollution. In addition, the theories deal with how organizations communicate with those stakeholders is important. Furthermore, is their firms performance matching the stakeholders demands? How do stakeholders evaluate the performance of these organizations? Gray, Kouhy and Lavers and ODonovan (2002) point out (as cited in Deegan 2009) that stakeholder theory is overlapping with small differences in explaining the firms behaviour towa rd the society. Moreover, stakeholder theory posits that organizations are performing in order to fulfilling the expectations of particular stakeholders who are able to impact on their performance. Previous studies (e.g. Buchholz Rosenthal 2004 Cormier, Gordon Magnan 2004 Schwarzkopf 2006) show that stakeholder theory is used to explain improvements in business organisational performance while providing disclosures to create better relationships between companies and their stakeholders.Although there are many studies that found the relationship between CSR disclosure and OP in terms of FP, EC, and CR to be a positive relationship (Aguilera et al. 2007 Rettab, Brik Mellahi 2009 Saleh, Zulkifli Muhamad 2008 Simpson Kohers 2002 Waddock Graves 1997), there are studies which found a negative and mixed relationship (Griffin Mahon 1997 Wright Ferris 1997). Thus, this theory has been supported by some studies (e.g. Neville, Bell Menguc 2005 Orlitzky, Schmidt Rynes 2003 Peloza Pap ania 2008 Snchez Sotorro 2007 van Beurden Gssling 2008).2.1.2 Value theoryValue theory claims that although stakeholders are different in terms of their value priorities, the interest of a stakeholders value system is universal. This means that the stakeholders differ only in terms of the relative importance that they place on these universally important value types (Siltaoja 2006). Therefore, large firms have as many reputations as there are distinctive groups that take an interest in them (Bromley 2002). In addition, MacMillan et al (2005) points out that stakeholders (employees, shareholders, customers, community, investors, supplies) prefer coherence with a common concern for a reputation entity. Hence, in order to maintain these firms reputations, they should improve the relationship with their stakeholders via CSR disclosure.Many studies set out the importance of stakeholder perceptions in order to understand the nature of a firms reputation (Dowling 2004). In addition, Silt aoja (2006, p. 95) suggests that value is an over arching matter, meaning a company with good reputation has values, which suit to individuals own values. Value theory was employed to explore the nature of CSR and corporate reputation using qualitative (Siltaoja 2006). Schwartzs study (1999) shows ten motivationally distinct types of values such as power, achievement, hedonism, stimulation, benevolence, and security that enable scholars to use them in culture world wide. These motivations are included within CSR actions that are disclosed in annual reports of firms. Furthermore, there are other studies that explain the eight most common survey instruments to use in order to create values (measures) through corporate reputation such as Fombrun, Gardberg and Sever (2000). One of the most used measures (values) is the Reputation QuotientSM that consists of six measures (values).Thus, this study will use CSR disclosure that is variously associated with reputation via the Reputation Quot ientSM to determine the relationships between CSR disclosure and CR through value theory.2.2 Review of the related literature2.2.1 CSR disclosure and organisational performanceResearchers efforts have been made to comprehend the impact of CSR activities on OP (Husted Allen 2000 Husted de Jesus Salazar 2006 Marom 2006 McWilliams Siegel 2001 Moneva, Rivera-Lirio Mu oz-Torres 2007 Orlitzky, Schmidt Rynes 2003 Wright Ferris 1997). The above studies found that there is a relationship between CSR activities, disclosure and OP but which indicates positive, negative, mixed, and non-significant results. On the one hand, some studies found that there is a positive relationship between CSR activities and OP (DeMaCarty 2009 Marom 2006 May Khare 2008 Peloza 2009 Ruf et al. 2001 Saleh, Zulkifli Muhamad 2008 Simpson Kohers 2002 van Beurden Gssling 2008 Waddock Graves 1997). Furthermore, Rettab, Brik Mellahi (2009) revealed that there is a positive relationship between CSR activities an d OP in developing countries (UAE firms) in Dubai. On the other hand, some studies have reported a negative relationship Vance (1975) and Mackinlay (1997) (as cited in Park Lee 2009) and Wright and Ferris (1997) or no significant relationship (Aupperle et al, 1985 Davidson and Worrell, 1990 Preston, 1978 Spicer, 1980) (as cited in Park Lee 2009) and McWilliams and Siegel (2000) between CSR and OP. However, these findings cannot be generalised from western developed economies to developing countries without further research because of different business systems.In Libya, there is no research about the impact of CSR disclosure on OP. Figure (2) shows the relationship between CSR, disclosure and the factors of estimating OP.2.2.2 CSR disclosure and financial performance (FP)Financial performance (FP) is considered one of the most important indicators of the strategic value of CSR (Orlitzky, Schmidt Rynes 2003). Researchers started the empirical study of CSR and FP over three decades ago in western countries. There are two types of empirical studies of the relationship between CSR and FP. The first set uses the event study methodology to measure short-term financial impact when companies engage in socially responsible or irresponsible acts (e.g. Hannon Milkovich 1996 Margolis Walsh 2003 McWilliams Siegel 2000 Orlitzky, Schmidt Rynes 2003 Saleh, Zulkifli Muhamad 2008 Wright Ferris 1997). The relationship between CSR and FP was mixed in the results of these studies. For instance, McWilliams Siegel (2000) revealed no relationship, Wright Ferris (1997) found that the relationship between CSR and FP was negative and Saleh, Zulkifli Muhamad (2008) that it was a positive relationship. In addition, Margolis and Walsh (2003) found that 4% of the 160 studies examined reported a negative relationship between CSR and FP, 55% a positive relationship, for 22% there was no relationship, and 18% reported a mixed relationship. Furthermore, Orlitzky, Schmidt and Rynes ( 2003) achieved another meta-analysis and revealed similar results. While other studies are not similarly stable concerning the relationship between CSR and short-term financial return (McWilliams Siegel 2001).The examination of the nature of the relationship between measures for long-term financial performance and measures of CSR is the second set that is used from accounting and financial measures of profitability (e.g. Aguilera et al. 2007 Mahoney Roberts 2007 McGuire, Sundgren Schneeweis 1988 McWilliams Siegel 2000 Simpson Kohers 2002 Waddock Graves 1997). They also gained mixed results in these studies. Waddock Graves (1997) and Simpson Kohers (2002) found a significant positive relationship between CSR and profitability. While McGuire, Sundgren Schneeweis (1988) revealed that subsequent performance was less closely related to CSR than prior performance. Aguilera et al (2007) discuss the relationship between CSR and FP. They found that there is strong evidence for a pos itive and significant association between them. In addition, McWilliams and Siegel (2000) examined the relationship between two with a regression model that measures financial performance as the dependent variable while social performance as the independent variable during the period 1991-1996 for 524 large companies. They concluded that there was no link between CSR and FP if the regression model was properly specified. Moreover, Simpson Kohers (2002) tested the relationship between CSR and FP in the banking industry. The community Reinvestment Act (CRA) was used as a social performance measure. They found that there is a positive relationship between CSR and FP. Griffin Mahon (1997) revealed that the relationship between CSR and FP was mixed between a positive and negative relationship. However, most of the findings found a positive relationship. Furthermore, Moore Robson (2002) analysed the link between CSR and FP of eight firms. They used the derivation of a 16-measure social performance index and a 4-measure financial performance index. They depended on statistically significant results. They found a positive relationship between CSR and FP in spite of small numbers of firms. Mahoney Roberts (2007) also examined the relationship between CSR and FP in a large sample of public companies during four years of panel data in Canada. This study yielded no significant relationship between them. Yet, they revealed a significant relationship between some CSR activities such as environmental and international activities and FP. Finally, Rettab, Brik Mellahi (2009) in the UAE market as an emerging economy conducted the latest study of CSR and FP. They tested the relationship in 280 industries (manufacturing, trading and repairing services, hotels and restaurants, real estate, rental, and business services, education, banking and financial services, mining and quarrying, and others). Although there are some challenges that have contributed to ineffective engageme nt with stakeholders and the lack of communication of CSR activities, they found a strong positive relationship between CSR and FP.All of the studies above were done in western countries and the US except the Rettab, Brik, and Mellahi study. Rettab, Brik Mellahi (2009) examined the relationship between CSR and FP by questionnaire, while this study will examine the relationship between CSR disclosure through annual reports and FP. This indicates that there is limited research that has investigated CSR disclosure and FP in developing countries. In addition, no known study has examined the relationship between CSR disclosure and FP in Libya. Therefore, this study will attempt to contribute in this area and may facilitate more intensive research on CSR disclosure and FP links outside of western countries and US markets in the future, especially in Libya as a developing and emerging country. Based on the above, this studys hypothesis is thath3 There is a relationship between CSR disclos ure and financial performance (FP) in Libya.2.2.3 CSR disclosure and employee commitment (EC)Employees are considered one of the most important factors in a firm they affect an organisation in fundamental ways. Therefore, (Collier, Esteban Street 2007, p. 22). In recent years, employee commitment has been one of the most studied indicators of the strategic value of CSR. Jaworski and Kohli (1993, p 60) (as cited in (Rettab, Brik Mellahi 2009)) employee commitment is defined asCarroll (1979) suggests that CSR and community contributions reflect the way in which a firm interacts with the physical environment and its ethical stance towards consumers and other external stakeholders. External CSR relates to internal and external information sources including the media and personal experiences within the company which may be expected to base the opinion of their employees about these activities. Employees and managers have a greater stake in the success of the corporation than investor, owners, because their jobs and economic livelihood are at stake (Post 2003). Branco and Rodrigues (2006) suggest that CSR disclosure leads to important results in the creation or deletion of other fundamentally intangible resources, and may help build a positive image with employees and managers. Maignan and Ferrell (2001), Maignan and Ferrell (2004), Backhaus, Stone and Heiner (2002), Brammer, Millington and Rayton (2007), and Peterson (2004) expected that there is a positive relationship between CSR and EC. Furthermore, Albinger and Freeman (2000), Backhaus, Stone and Heiner (2002), Greening and Turban (2000), Maignan, Ferrell and Hult (1999), and Peterson (2004) revealed that there actually is relationship between CSR and EC. At the same time, the relationship between procedural justice and affective commitment may be expected to be positive because employees may be expected to identify with ethical organizations (Brammer Millington 2005). The existing literature provides compel ling empirical support for these arguments a strong relationship has been found between the ethical climate of organizations and job satisfaction (Koh Boo 2001 Viswesvaran, Deshpande Joseph 1998) and studies about the relationship between organizational commitment and procedural justice suggest that they are positively and significantly related (Albinger Freeman 2000 Backhaus, Stone Heiner 2002 Cohen-Charash Spector 2001 Greening Turban 2000 Meyer et al. 2002 Peterson 2004 Turban Greening 1997). Overall past studies illustrate that a firms social responsibility deal with matter to its employee and expect to have a positive impact on EC (Albinger Freeman 2000 Backhaus, Stone Heiner 2002 Cohen-Charash Spector 2001 Greening Turban 2000 Meyer et al. 2002 Peterson 2004 Turban Greening 1997). These studies also illustrated that a firms social responsibility deals with matters that relate to its employees and can be expected to have a positive impact on employees commitment. In addition, Maignan et al (1999) expected that firms that disclose CSR activities might enjoy enhanced levels of EC for two reasons they are devoted to ensuring the quality of the workplace experience, and they inform their stakeholders about social issues such as the welfare of the community or the protection of the environment.Rupp et al (2006) noticed that employees perceptions of their firms CSR activities lead their perceptions of the firm. In addition, firms that disclose CSR activities work to ensure their employees protection through fair and socially responsible practices (Rupp et al. 2006). Thus, it can be seen that firms that engage in CSR activities should result in a positive relationship in relation to their EC because they might earn employees commitment compared with firms that do not engage in appropriate CSR activities (Aguilera et al. 2007). In addition, a positive relationship between CSR and FP is more likely to lead a positive relationship between CSR and EC (Re ttab, Brik Mellahi 2009). Rettab, Brik and Mellahi (2009) found that there is a positive relationship between CSR and EC in the UAE market. One the other hand, Turker (2009) found that there is no link between CSR to government and the commitment level of employee by using social identity theory.Most of the studies above indicated that there is a positive relationship between CSR and EC, whereas few studies found a negative, insignificant and fixed relationship between them. In addition, there is limited research that has investigated CSR disclosure and EC in developing countries. Furthermore, no known study has examined the relationship between CSR disclosure and EC in Libya. Therefore, the proposed research hypothesis is thath3 There is a relationship between CSR disclosure and employee commitment (EC) in Libya.2.2.4 CSR disclosure and corporate reputation (CR)There is significant research which provides evidence to define corporate reputation (CR) as according to Siltaoja (2006, p. 91)CR also is (Neville, Bell Menguc 2005, p. 337). Emerging CSR lead to enhanced corporate reputation whereas non-emerging CSR leads to destroyed CR for a firm. According to McWilliams and Siegel (2001, p. 120) CSR. Similarly, (Battacharya Sen, 2003 as cited in Rettab, Brik Mellahi 2009, p. 377) that shows CSR. Additionally, some companies may employ social responsibility disclosure as one of the informational signals upon which stakeholders base their assessments of CR under conditions of incomplete information (Branco Rodrigues 2006). Also, Branco and Rodrigues (2006) explain that enhancing the effects of CSR in CR is a particularly important aspect of CSR disclosure. In addition, Hooghiemstra (2000) argues that one of the most important communication instruments that is used by firms to enhance, create, and protect their images or reputations is CSR disclosure. Moreover, it is not easy to create a positive reputation without making the associated disclosures for firms inv esting in social responsibility activities to realise the value of such reputation (Hasseldine, Salama Toms 2005 Toms 2002). Furthermore, Toms (2002) explains that disclosure in annual reports, disclosure of environmental policies and their implementation were found to contribute explicitly to creating a positive CR. Besides that, Toms (2002), and Hasseldine, Salama and Toms (2005) found that the qualitative nature of environmental disclosure is more important than the quantitative nature of environmental disclosure, and has a strong effect on the creation, enhancement, and protection of CR. Thus, the relationship between CSR disclosure and CR should be clear and positive.However, the relationship between CSR and CR in developing countries as well as emerging economies is not explicit. Although the link between CSR and CR is not straightforward in emerging economies, the link between CSR and EC is observed because employees are able to observe their firms CSR activities, and thus t he impact of CSR on corporate reputation can be measured (Rettab, Brik Mellahi 2009). It can be observed in the national media or in the annual report. Communicating effectively a with wide range of stakeholders enables firms to demonstrate their ability to enhance their CR. Therefore, firms operate in accordance with social and ethical criteria they are able to create a positive reputation, but failing to do so can be a source of risk to their reputation (Branco Rodrigues 2006).The growing attention to reputation has helped to increase a number of different construct measures (Helm 2005). Fombrun (1998) engages six criteria that appear to dominate the construction of reputation in the annual reports community involvement, employee treatment, product quality, financial performance, environmental performance and organizational issues. Most of these criteria represent some CSR activities. Lewis (2001) lists similar criteria but with an emphasis on responsibility product quality, cus tomer service, treatment of staff, financial performance, quality of management, environmental responsibility and social responsibility. Schultz, Mouritsen and Gabrielsen (2001) showed the reputation criteria as being based on environmental responsibility, price, human resources, internationalization, financial strength and importance to society. Therefore, all of these criteria affect corporate reputation. Peterson (2004) noted that recent corporate experience in the oil and pharmaceuticals industries has emphasized negative consequences for CR which is more likely to flow from inappropriate behaviour towards the environment or consumers. At the same time, Brammer and Millington (2005) have found positive relationships between CR and CSR activities and Hess, Rogovsky and Dunfee (2002) have shown a similar relationship between corporate involvement in social causes and reputation. Also, Clarke and Gibson-Sweet (1999) note that the importance of the use of corporate disclosure is con sidered an effective factor in the management of reputation and legitimacy. Finally, Rettab, Brik and Mellahi (2009) found that there is a positive relationship between CSR and CR in the UAE market.Most of the studies above were done in western countries and the US except Rettab, Brik, and Mellahis (2009) study. This indicates that there is limited research that has investigated CSR, disclosure and CR in developing countries. In addition, no known study has examined the relationship between CSR, disclosure and CR in Libya. Regarding the conflict about the expected direction of this relationship, this research project hypothesises thatH3 There is a relationship between CSR disclosure and corporate reputation (CR) in Libya.2.3 Gaps in the literature and the contributionAfter reviewing the literature, this study identified the following gaps firstly, all studies evaluating CSR disclosure in Libya have not examined the link between CSR disclosure and OP. In addition, the amount of resea rch is limited that has investigated the impact of CSR disclosure practices on OP either in Australia or internationally especially the relationship bet