The impact of profitability on corporate social responsibility accounting disclosure: Evidence using system GMM estimation

As sustainability becomes an increasingly critical priority, analyzing the relationship between profitability and corporate social responsibility (CSR) accounting disclosure offers essential insights into how financial performance influences a company’s commitment to ethical and transparent practices (Eriqat et al., 2024; Rahmawati et al., 2024). This study focuses on the Tunisian stock index to assess the impact of profitability, audit committee, company size, and activity on CSR by applying the system generalized method of moments (GMM) approach. Our empirical analysis reveals that profitability ratios negatively influence sustainability, indicating that higher profitability may diminish CSR initiatives. Secondly, the activity ratio demonstrates no substantial positive impact on sustainability, reflecting its limited role in driving CSR efforts. Conversely, company size exhibits a significant positive relationship with sustainability, underscoring the importance of larger firms in advancing CSR practices. Lastly, findings indicate that the audit committee negatively affects sustainability, suggesting a misalignment between governance structures and CSR objectives. In terms of policy implications, these insights call for revisiting governance structures to align corporate objectives with environmental and social goals, ensuring holistic economic growth.