Corporate Social Responsibility towards Investors’ Wealth: An Empirical Evidence from Agricultural Sector in Indonesia

Abstract

The purpose of this study is to determine whether Corporate Social Responsibility Disclosure (CSRD), with Leverage and Company Size as control variables, has a significant effect on Earnings per Share (EPS) in the agricultural sector of Indonesia Stock Exchange within 2013-2017. The sample of this study consisted of 13 agricultural companies through a purposive sampling technique. The Corporate Social Responsibility Disclosure (CSRD) guideline applied in this study is the fourth generation Global Reporting Initiative (GRI G.4). The dependent variable of investors' wealth is represented by Earnings per Share (EPS), the control variables represented by leverage is proxied by Debt to Equity Ratio (DER) and company size is proxied by the natural logarithm of total assets. This study applied a panel data model with the estimation model of random effect and Generalized Least Square (GLS) method. The results of this study indicate that CSRD, with control variables of leverage and firm size, has a significant effect on EPS. Based on the results of this research, CSR can be taken into account by shareholders and other stakeholders to assess the company as an entity that is able to generate financial benefits while still caring for the community and the environment as well.