The Effect of Financial Distress on Corporate Social Responsibility Disclosure: An Empirical Analysis of Infrastructure, Utility, and Transportation Listed Indonesia Stock Exchange 2015-2018)

Abstract

In the current dynamic era, companies often focus in gaining profits and forgetting social and environmental responsibilities. Moreover, in Indonesia, infrastructure development is a top priority compared to the development of other sectors. It turns out that in its implementation there are various impacts on the community's environmental and social sectors. Based on these thoughts, this study aims to examine the effect of financial distress on the extent of corporate social responsibility disclosure. The population used in this study are infrastructure, utilities, and transportation companies listed on the Indonesia Stock Exchange period 2015-2018 with sample of 144 samples. The guideline used to assess environmental disclosure is GRI Standards, which is the latest environmental and social disclosure guidelines issued by GRI. While the guideline used in calculating financial distress uses the third Altman Z Score model. Data processing and analysis for statistical hypothesis testing is done by using SPSS software. The results of this study indicate that the value of Altman Z Score on average decreased 20,13% from 2015-2018 and the corporate social responsibility disclosure on average increased 21,08% from 2015- 2018. This research also results that financial distress have a significant effect on the are of corporate social responsibility disclosure.