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Policy Discussion SeriesConference Paper
“The New Normal Era: Looking for Recovery Strategies for Economy and Businesses”
The First International Conference of Economy, 16 November 2021, Jakarta
The Moderating Role of Industry Type on the Effect of Sustainability Report Disclosure on Firm Value: Evidence from Indonesia
Desi Yuniasih
Universitas Pembangunan Nasional Veteran Jakarta
Jakarta, Indonesia
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Dewi Darmastuti
Universitas Pembangunan Nasional Veteran Jakarta
Jakarta, Indonesia
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Abstract
This study aims to find empirical evidence of the role of industry type in moderating the effect of the sustainability report disclosure on firm value. This study uses panel data regression analysis of 41 non-financial sector companies listed on the Indonesia Stock Exchange (IDX) and consistently published annual and sustainability reports from 2018 to 2020. the findings show that sustainability report disclosure, economic disclosure, and environmental disclosure do not significantly affect firm value. In contrast, social disclosure has a significant positive effect on firm value. In the other case, industry type only strengthens the effect of economic, environmental, and social disclosure on firm value. Overall, it shows that management thinks investing in environmental or publishing sustainability reports could bring some economic issues, which will lover the market value. High-profile companies tend to be more concerned about disclosing their sustainability performance because they have more responsibility for their business process. This study provides insight into the effect of industry type in moderating the relationship between sustainability report disclosure and firm value, which has not been widely studied, especially in Indonesia. Regulators can consider the results of this study regarding the sustainability reports disclosure.
Keywords: : firm value, sustainability report disclosure, industry type, signaling theory
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