Abstract
The objectives of this study are; firstly, to examine the effect of profitability on Corporate Social Responsibility (CSR) disclosure; secondly, to examine the effect of leverage on CSR disclosure; thirdly, to examine the effect of company size on CSR disclosure; fourth, to find out whether the effect of leverage on CSR disclosure will be more significant with the inclusion of the variable of majority ownership as moderating variable; fifth, to find out whether the effect of profitability on CSR disclosure will be more significant with the inclusion of the variable of majority ownership as moderating variable. The sample was taken using a purposive sampling technique with 50 manufacturing companies during the period 2011- 2012 which fulfilled the required criteria as the research sample. They were analyzed moderation regression analysis approach. It shows that, first, profitability has positive effect on CSR disclosure; second, leverage has no effect on CSR disclosure; third, company size has an effect on CSR disclosure; fourth, majority ownership moderates the effect of leverage on CSR disclosure; fifth, majority ownership does not moderate the effect of profitability on CSR disclosure. Some limitations stated in this study are expected to be used as references for the improvement of similar studies in the near future.
Highlights
Environmental uncertainty is a strategic issue in the ever-expanding business world
Research conducted by Nofandrilla (2008) finds that company size has a significant influence on Corporate Social Responsibility (CSR) disclosure
It is in contrast to the research conducted by Soliman (2012) that institutional stock ownership has a positive relationship with CSR disclosure, which means that the greater the institutional ownership, the stronger the external control of the company
Summary
Environmental uncertainty is a strategic issue in the ever-expanding business world. In that situation, the company’s survival is determined by how well it can respond to the uncertainty. According to Utama (2007), the development of CSR is linked to the increasingly severe environmental damage occurring in Indonesia and the world, ranging from deforestation, air and water pollution, resulting in climate change. In line with this development, Law no. Research conducted by Nofandrilla (2008) finds that company size has a significant influence on CSR disclosure This is not in line with the results of the research conducted by Anggraini (2006) and Roberts (1992) that company. Leverage, company size, CSR disclosure, and majority ownership is interesting to be re-examined, given previous research provides different results. This research is conducted to provide empirical evidence of the effect of profitability on CSR disclosure and to expand previous research which examined the effect of profitability on CSR (Sembiring 2003)
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