Final answer:
The multivariate regression analysis helps to determine the relationship between management's decision to disclose CSR and various factors such as financial performance, regulatory requirements, and stakeholder pressure by estimating a regression equation with these variables as independent factors.
Step-by-step explanation:
To examine if the management decision to disclose Corporate Social Responsibility (CSR) is a function of certain factors, you can run a multivariate regression analysis. In this case, the dependent variable would be the decision to disclose CSR, and the independent variables would be: a) Financial performance, b) Regulatory requirements, and c) Stakeholder pressure.
The multivariate regression model will help determine the relationships and the strength of the relationships between the decision to disclose CSR and the three independent variables. This involves estimating the following regression equation:
Y = β0 + β1X1 + β2X2 + β3X3 + ε
Where,
- Y represents the decision to disclose CSR
- β0 is the intercept
- β1, β2, β3 are the coefficients for each independent variable
- X1, X2, X3 represent financial performance, regulatory requirements, and stakeholder pressure, respectively
- ε is the error term
To carry out the multivariate regression, you'll need data on each of these variables. The model would allow you to assess the impact of each factor on the likelihood of CSR disclosure by the management. A positive coefficient (βi) would indicate a direct relationship with the decision to disclose CSR, while a negative coefficient would suggest an inverse relationship.