<scp>CSR</scp> disclosure and investment efficiency in <scp>MENA</scp> countries: The moderating role of <scp>CSR</scp> committee

ABSTRACT Corporate social responsibility disclosure (CSRD) is often recognized as a transparency mechanism that allows companies to communicate their commitment to CSR. However, CSRD may also exacerbate agency conflicts. This study addresses these two contrasting perspectives by investigating the impact of CSRD on investment efficiency and exploring the moderating role of the existence of a CSR committee. The analysis uses a panel of 273 firms operating in 10 Middle East and North Africa (MENA) countries from 2011 to 2022. Using regression models, the findings show that CSRD reduces investment efficiency, primarily due to an increase in underinvestment. This relationship is moderated by the presence of a CSR committee. Furthermore, an examination of the influence of topic‐specific CSRD on investment efficiency reveals that disclosures related to employees and environmental issues contribute to a decline in investment efficiency. This paper offers practical implications for firms that need to reassess their CSRD strategies, for policymakers who should consider transitioning from voluntary disclosure to mandatory CSR reporting, and for investors who must exercise greater diligence in evaluating the potential benefits of CSRD.