Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

Abstract

The role of corporations in waste management can reflect the superior performance in innovation and the risk a company is willing to take to engage in the circular economy. The superior performance of corporate waste management can be reflected in the corporate disclosure as a media of accountability and transparency. This research investigates the association between waste disclosure and corporate risk-taking and the moderating role of foreign ownership in companies in Indonesia as an emerging country struggling to find an effective solution toward environmental problems, including waste. The observation was performed on non-financial companies listed on the Indonesian Stock Exchange for the period 2018-2021. Panel regression was used to find the answers to the research questions of the direct and moderate associations among corporate waste disclosure, risk-taking and foreign ownership. The results show that waste disclosure encourages increased corporate risk-taking, which means that companies that disclose waste are companies with good accountability and environmental performance and tend to take risks that can increase value. Foreign ownership was not found to statistically strengthen the relationship between waste disclosure and corporate risk-taking, which is different from the expectation that improving the transparency of waste information can attract a greater inflow of foreign investor resources. This brings implication that investors need to increase attention to the issue of corporate waste management and put pressure on companies to provide information on corporate waste performance for investment decision-making. Furthermore, the results of the study also found that waste disclosure in Indonesia is still low compared to the international disclosure standard. This research contributes to the sustainability accounting literature in developing countries by outlining the role of waste disclosure.

Economic asymmetries and the new “markets of tomorrow”

“…This article's contribution to the literature is developing a business strategy and concept that rethinks their specificities in the new markets of tomorrow. The article also confirms ongoing analyses (Bagul et al, 2023; Patil & Vhavale, 2023; Setiarini et al, 2023; Sharma & Bhat, 2023) on the issues of business strategy and development. Based on the research results, it is a clear and undeniable fact that business strategy and development are determined by three fundamental factors: viral threat, digitalization, and sustainable development.…”

“…Specifically, it examines the economic asymmetry of new markets and how it leads to differences in digitalization and competitiveness among countries. This article is mainly concerned with identifying these disparities and their implications for the future (Bagul et al, 2023; Patil & Vhavale, 2023; Setiarini et al, 2023; Sharma & Bhat, 2023). Ndalamba (2019) has explored the problematic public policies and the leadership challenge for South Africa's socio‐economic transformation.…”

The purpose of the company beyond its position in the market: The new agent of social development

“…This frame of reference is evidenced in examples such as the search for a circular supply chain (Härri et al, 2023), innovation towards a sustainable industry (Narkhede et al, 2023), the application of this modality in companies with different size (small, medium and large) (Madrid-Guijarro & Duréndez, 2023), and the reformulation of types of company according to their integration to these objectives (Riso et al, 2023). Said transversality is also evidenced in CSR actions, which are visible in the regulation of environmental impact (Panda & Kanti, 2023;Wulansari & Adhariani, 2023), the attention in favor of the surrounding community (Patil & Vhavale, 2022), the influence of companies in the economic development of their regions (Zhakupov et al, 2022), and the participation of the government itself to promote better practices (Hossain et al, 2023). All these proposals arise in a global scenario in which companies with profit-oriented purposes are questioned, and others are raised in which participation oriented towards society and the environment is promoted.…”

Sustainability reporting for boosting national commitment and overcoming challenges: A hierarchical model

“…The data are used by investors to identify viable sustainable investments and to manage portfolio risks. They use it to actively engage businesses in issues of sustainability and to evaluate their long-term performance (Setiarini et al, 2023). Governments use it to track progress towards sustainability goals and promote transparency and accountability across sectors.…”