The Influence of Corporate Social Responsibility (CSR) Disclosure and Sustainability Accounting on Earnings Response Coefficient (ERC)

Haryono Umar

doi:10.47191/ijcsrr/v4-i7-10

Abstract

The research aimed to analyze the factors which provide earning response coefficient (ERC) received by automotive manufacturing companies listed on the Indonesia Stock Exchange using indicators of corporate social responsibility (CSR) and sustainability accounting from 2013 through 2017. The purposive sampling technique was used to gather data with the criteria, according which 13 companies were obtained as samples, (1) automotive manufacturing companies in 2013 – 2017 listed on the Indonesia Stock Exchange (IDX) (2) automotive manufacturing companies that published the annual reports. Meanwhile, the data were obtained from IDX & published annual reports. The research used a panel data regression panel and data regression model as the analysis technique. The analysis consists of three methods, namely common effect method, fixed-effect and random effect, while the hypothesis testing used t-statistics to test partial regression coefficients and f statistics to test the effect simultaneously at the significance level of 5%. Eventually, the results of the analysis used E-views to show whether: (1) corporate social responsibility (CSR) influences the earnings response coefficient (ERC) and (2) sustainability accounting influences the ERC. The T-test analysis results used E-views to reveal whether CSR and sustainability accounting influence ERC in automotive manufacturing companies listed on the IDX in 2013 – 2017.

Highlights

Companies are required to disclose their corporate social responsibility activities to the communities
It is necessary to conduct a research which investigates the effect of corporate social responsibility (CSR) disclosure and sustainability accounting on earnings response coefficient (ERC)
It is quantitative research with a scope limited to corporate social responsibility (CSR), sustainability accounting and earnings response coefficient (ERC) in automotive manufacturing companies listed on the Indonesia Stock Exchange (IDX)

Summary

Introduction

Companies are required to disclose their corporate social responsibility activities to the communities Such disclosure is a potential factor to create regulation in informing corporate financial statements in the capital market in line with corporate social responsibility activities which can become information for stakeholders. The capital market is a major driving factor for disclosing corporate social responsibility Both financial and annual reports provide information that must be officially published. It is necessary to conduct a research which investigates the effect of corporate social responsibility (CSR) disclosure and sustainability accounting on earnings response coefficient (ERC). For the purpose, this empirical study was conducted on automotive manufacturing companies listed on the Indonesia Stock Exchange in 2014 – 2018

Methods

Results

Conclusion