Market Response to Disclosure of Corporate Social Responsibility (CSR) during the COVID-19 Pandemic

Abstract

This article aims to disclose the CSR on stock price and trading and examine the profitability as the reinforcement variable between CSR disclosure on stock prices and the trading volume during the COVID-19 Pandemic. The object of the study was the LQ45 companies in the Indonesia stock exchange between 2019-2020. However, the study only involved 38 companies. We used the 2019 and 2020 data accessed from the official site of the Indonesia Stock Exchange (IDX) www.idx.com. The closing stock price and trading volume data were obtained from www.yahoofinance.com. Data were tested and analyzed using Partial Least Square (PLS) technique. The study found that the disclosure of CSR was positively but not significantly influential on the stock price. The disclosure of CSR is negatively but not significantly influential on the trading volume. The profitability does not strengthen the influence of CSR disclosure on stock price, and the profitability does not strengthen the negative influence of CSR disclosure on trading volume. The research findings suggest the company management continues to run CSR programs despite the unstable economic conditions due to the COVID-19 Pandemic