Bridging the Gap between Sustainability Disclosure and Firm Performance in Indonesian Firms: The Moderating Effect of the Family Firm

Abstract

This study investigates the impact of sustainability reporting on firm performance. This paper also examines the moderating effect of family ownership on the relationship between sustainability disclosure and firm performance. The research sample consists of 850 primary and secondary sector companies listed on the Indonesian stock exchange between 2014 and 2020. This study generates its results using a panel model with Generalized Least Square (GLS) regression. This study concludes that sustainability disclosure has a positive impact on the financial performance of market- and accounting-based companies. Additionally, family businesses strengthen the link between sustainability disclosure and firm performance. The findings of this paper provide unique and useful information for company stakeholders and managers seeking to improve sustainability disclosure for optimal performance. In addition, it can be advantageous for the policymaker to establish the policy. This study contributes to the literature by providing comprehensive examination of the relationship between sustainability disclosure and company performance.