The Impact of Corporate Social Responsibility Disclosure on the Future Earnings Response Coefficient (ASEAN Banking Analysis)

Abstract

Corporate social responsibility in the banking industry has an impact on the environment and society. Research was conducted on the impacts of environmental social responsibility disclosure on future income response coefficients of The Association of South East Asian Nations (ASEAN) Banking to determine the level of concern ASEAN banks have in disclosing corporate responsibility, and to understand the levels of future revenue response coefficients. The variable in this research was measured by corporate social responsibility disclosure, while the variable of the Future Earnings Response Coefficient (FERC) was based on the value of banking stocks. Other variables—size, growth, earning persistence, and earnings volatility—were the control variables. The sampling method used was a purposive sampling approach; a research sample of 280 banks in 5 ASEAN countries was determined with this provision: banking report data were taken from the stock exchanges of each country and sustainability reports, using the Global Reporting Initiative (GRI) standard version 4 (G4) from 2014 to 2018. The researchers used conducted multiple regression analysis to examine the variables. The analysis tools used included panel data, so that data processing was carried out using review software. The results of the study show that corporate social responsibility disclosure has a positive and significant effect on the future earnings response coefficient, whereas other variables (i.e., company size, growth, and earnings persistence), do not have a relationship with the disclosure of corporate responsibility or FERC. Only the volatility of earnings has an influence on disclosure of corporate social responsibility and FERC.

Strengthen the Impact of CSR Information and Audit Quality on Investment Decisions: The Role of Good Corporate Governance in ASEAN Countries

“…Information in the company's financial statements has a critical role in the capital market, both for individual investors and the market as a whole [3,[8][9]. For investors, information plays an important role in making investment decisions, while the market uses it to reach new equilibrium prices.…”

“…The form of capital market in ASEAN Countries are close to semi-strong efficient market form. Semistrong form in an informed manner, which is reflected in the speed with which investors react to new information entry [8]. A semi-strong efficient market (semistrong form) can be tested by looking at the abnormal returns that occur through stock price changes [8,11].…”

“…Semistrong form in an informed manner, which is reflected in the speed with which investors react to new information entry [8]. A semi-strong efficient market (semistrong form) can be tested by looking at the abnormal returns that occur through stock price changes [8,11]. Abnormal return is the difference between actual return and expected return [11].…”

“…To get this Return, investors need the information to choose the right time to determine whether to buy, sell, or hold a security. This information is beneficial for investors in making investment decisions [8]. This condition will be fulfilled if the capital market is in an efficient condition.…”

A comprehensive study on the quality of sustainability reporting disclosure between Indonesia and other countries

“…In the triple bottom line, one of the pillars is about preserving the environment (planet) (Malizia & Monmany-Garzia, 2019). The pillar of environmental preservation is becoming increasingly popular and companies are trying to fulfill it in an effort towards mandatory reporting for sustainability (Istianingsih et al, 2020;Thornton, 2013). This mandatory sustainability reporting is fully supported by the government's efforts to reduce environmental problems with the issuance of Law No.40 of 2007 concerning Limited Liability Companies.…”