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The Effect of Sustainability Information Disclosure on Financial and Market Performance: Empirical Evidence from Indonesia and Malaysia

Author

Listed:
  • Pancawati Hardiningsih

    (Faculty of Business and Economics, Diponegoro University, Indonesia,)

  • Indira Januarti

    (Faculty of Business and Economics, Diponegoro University, Indonesia,)

  • Etna Nur Afri Yuyetta

    (Faculty of Business and Economics, Diponegoro University, Indonesia,)

  • Ceacilia Srimindarti

    (Faculty of Business and Economics, Stikubank University, Indonesia,)

  • Udin Udin

    (Faculty of Business and Economics, Universitas Muhammadiyah Yogyakarta, Indonesia.)

Abstract

This study aims to analyze the effect of sustainability information disclosure on financial and market performance. Using purposive sampling, this study obtains 21 mining sector companies in Indonesia and 18 companies in Malaysia. Regression analysis with WarpPLS is used to test the proposed hypotheses. The results show that environmental and social disclosure has a significant effect on return on assets (ROA), return on equity (ROE), price-earnings ratio, and Tobin Q in Indonesia and Malaysia. Overall, there is no significant difference in financial and market performance between Indonesia and Malaysia. Good sustainability information disclosure further improves financial performance and trust among stakeholders and regulators in decision making, which in turn, increases corporate value.

Suggested Citation

  • Pancawati Hardiningsih & Indira Januarti & Etna Nur Afri Yuyetta & Ceacilia Srimindarti & Udin Udin, 2020. "The Effect of Sustainability Information Disclosure on Financial and Market Performance: Empirical Evidence from Indonesia and Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 18-25.
    • Handle: RePEc:eco:journ2:2020-02-3
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    References listed on IDEAS

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    2. M. Chabachib & Tyana Ulfa Fitriana & Hersugondo Hersugondo & Imang Dapit Pamungkas & Udin Udin, 2019. "Firm Value Improvement Strategy, Corporate Social Responsibility, and Institutional Ownership," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 152-163, July.
    3. Craig Michael Deegan, 2019. "Legitimacy theory," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 32(8), pages 2307-2329, July.
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    Cited by:

    1. Suripto Suripto & Dedy Hermawan & Putri Irmal Sari & Ahmad Rifai, 2022. "Impact of Green Management and Earning Management of Energy Companies in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 192-196, May.
    2. Rohaida Abdul Latif & Nurul Huda Yahya & Kamarun Nisham Taufil Mohd & Hasnah Kamardin & Arifatul Husna Mohd Ariffin, 2020. "The Influence of Board Diversity on Environmental Disclosures and Sustainability Performance in Malaysia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 287-296.

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    More about this item

    Keywords

    Environmental disclosure; social disclosure; financial performance; corporate value;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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