.bramasamy@ceibsedu.pdfVIP

AAMJAF, Vol. 3, No. 1, 21–36, 2007 ASIAN ACADEMY of MANAGEMENT JOURNAL of ACCOUNTING and FINANCE DOES IT PAY TO BE GOOD IN DEVELOPING COUNTRIES? THE RELATIONSHIP BETWEEN CSR AND FINANCIAL PERFORMANCE IN MALAYSIA 1* 2 3 Bala Ramasamy , Hung Woan Ting and Matthew C.Y. Yeung 1China Europe International Business School, Shanghai, 699 Hong Feng Road, Pudong, Shanghai, P.R. China 2Nottingham University Business School, Malaysia Campus Jalan Broga, Semenyih, Selangor, Malaysia 3School of Business, The Op en University of Hong Kong, 30 Good Shepherd Street, Homantin, Kowloon, Hong Kong *Corresponding author: bramasamy@ ABSTRACT Corporate social responsibility (CSR) as a common business practice has only recently established a foothold in develop ing countries. This is evidenced by a lack of literature in the area of CSR among these countries. In Malaysi a, for instance, only a third of large businesses can be considered CSR active. The purp ose of this paper i s to determine if there is a link between CSR perf ormance and financial performance among these large businesses. We comp are the monthly average returns of a po rtf olio of CSR active comp anies (based on disclosure) against a portf olio of inactive CSR comp anies as well as against the market, represented by the Kuala Lump ur Stock Exchange Comp osite Index (KLSE-CI). Both risk unadjusted and risk adju sted returns were utilized in this study. In either case, we do not find strong statistical evidence to show that our CSR po rtfolio outperf orms the m