The sequential effect of CSR and COE: family ownership moderation
ISSN: 1747-1117
Article publication date: 19 November 2018
Issue publication date: 27 September 2019
Abstract
Purpose
This paper aims to examine the sequential effect of cost of equity capital and corporate social responsibility (CSR) disclosure with family ownership as a moderating variable.
Design/methodology/approach
This empirical study examines samples of manufacturing firm in Indonesia using multiple regression analysis.
Findings
Firms with high cost of equity capital in previous years have extensive CSR disclosure level. Further, firms with extensive CSR disclosure get benefit of lower cost of equity capital in the following year. Family ownership weakens the effect of previous years cost of equity capital on CSR disclosure. On the other hand, family ownership does not moderate the effect of CSR disclosure on the cost of equity capital.
Research limitations/implications
This study has limitations in terms of CSR measurement using keywords which may not include overall reporting contents. This study also excludes information in sustainability reports and websites, images and scanned files that may provide additional information about the company’s social and environmental activities. This study is limited in terms of the generalization aspect because it only examines firms in one type of industry in one country over three years’ period.
Originality/value
This study provides empirical evidence on the sequential effect of cost of equity capital and CSR disclosure with family ownership as moderating variable from an emerging market context, which has been rarely explored in the previous research.
Keywords
Acknowledgements
The authors thank LPDP (Indonesia Endowment Fund for Education) Scholarship from Ministry of Finance for the financial support during two years of master’s program at Universitas Indonesia.
Citation
Hajawiyah, A., Adhariani, D. and Djakman, C. (2019), "The sequential effect of CSR and COE: family ownership moderation", Social Responsibility Journal, Vol. 15 No. 7, pp. 939-954. https://doi.org/10.1108/SRJ-09-2017-0179
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited