Does the origin region of institutional shareholders influence water disclosure in Indonesian companies?

Abstract

AbstractThis study investigates the association between institutional shareholders and the extent of water disclosure in Indonesian companies based on the origin region of institutional investors, namely domestic, Asian, Western, and tax haven countries. Data are taken from 489 non‐financial companies listed on the Indonesia Stock Exchange (IDX) for the period of 2014 to 2019. The developed hypotheses are tested using panel data with the ordinary least squares (OLS) method. This study reveals the level of water disclosure in Indonesian companies is relatively low. The higher percentage of shares are owned by institutional shareholders from domestic, Asian, and tax haven countries result the lower level of water disclosure. On the other hand, institutional shareholders from Western countries are the driver of water disclosure practices in Indonesian firms. The findings of this study provide the empirical evidence for policymakers, investors, and other stakeholders on the role of institutional shareholders in promoting water‐related disclosure practices in developing countries like Indonesia.