Abstract
This study examines the impact of military connection and politically connection on Corporate Social Responsibility Disclosure. Using 110 firm year observations of Indonesia listed firms, we predict that the presence of military or politically connection in firms board will increase the Corporate Social Responsibility Disclosure level on its Sustainability Report. We found that military connected boards increase the Corporate Social Responsibility Disclosure while politically connection does not show any correlation. Our further analysis on specific type of each connection shows that military career position, army military origin, marine military origin, People's Consultative Assembly politically affiliation and House of Representation politically affiliation increase the level of Corporate Social Responsibility Disclosure level. Our result is robust due to various research model and Heckmana's two stage regression. © 2019 by author(s) and VsI Entrepreneurship and Sustainability Center.
Highlights
For a long time, the military has been viewed as developing value systems and beliefs in its veterans and their potentially great value in corporate business (Elder, 1986; Elder & Clipp, 1989; Groysberg, Hill, & Johnson, 2010)
All samples consisted of Indonesian listed companies, a developing nation where its government has lack of transparency and is inefficient (Leuz, et al, 2003; Porta, et al, 1997), which provides additional opportunity to establish a strong mutual business relationship (Harymawan, 2018). It indicates that political connection is an important variable to provide a robust result as we examine the correlation of military connection towards Corporate Social Responsibility Disclosure (CSRD), as political connection shares some similar characteristics with a military connection in terms of the mutual business relationship in developing countries
We reported the empirical result of research analysis on the relationship of military and political connection to Corporate Social Responsibility Disclosure (CSRD)
Summary
The military has been viewed as developing value systems and beliefs in its veterans and their potentially great value in corporate business (Elder, 1986; Elder & Clipp, 1989; Groysberg, Hill, & Johnson, 2010). We focus on examining the correlation of military-connected firms on CSRD to provide additional knowledge of militaryconnected board benefits on the firm. All samples consisted of Indonesian listed companies, a developing nation where its government has lack of transparency and is inefficient (Leuz, et al, 2003; Porta, et al, 1997), which provides additional opportunity to establish a strong mutual business relationship (Harymawan, 2018) It indicates that political connection is an important variable to provide a robust result as we examine the correlation of military connection towards CSRD, as political connection shares some similar characteristics with a military connection in terms of the mutual business relationship in developing countries. Our Heckman’s two-stage regression result provides additional empirically robust evidence of correlation of military connection and CSRD.
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