The Effect of Corporate Social Responsibility Disclosure on Economic Consequences: Case Study in Indonesia

Abstract

The objective of this study is to investigate the effect of corporate social responsibility (CSR) disclosure on economic consequences. The CSR disclosure consists of six dimensions, which based on GRI guidelines dimension (economic, environment, social, human right, society, and product liability). The economic consequences consist of three dimensions, which are the bid-ask spreads, the trading volume, and the share price volatility. The hypotheses are tested using multiple regression analysis with 167 samples of listed firms in Indonesian Stock Exchange in 2012. The result of research are as follows: (1) the effect of overall CSR disclosure on bid-ask spread is negative and significant, (2) the effect of environment dimension of CSR disclosure on bid-ask spreads is negative and significant, (3) the effect of human right dimension of CSR disclosure on bid-ask spreads is negative and significant, (4) the effect of overall CSR disclosure on trading volume is positive and significant, (5) the effect of environment dimension of CSR disclosure on trading volume is positive and significant, and (6) the effect of human right dimension of CSR disclosure on trading volume is positive and significant.