Ratna Wardhani

Social Responsibility Disclosure, Corporate Governance and Cost of Equity Capital

This study aims to examine whether social responsibility disclosure positively affects the cost of equity capital in the previous year and to test whether social responsibility disclosure negatively affects the cost of equity capital in companies with good corporate governance. The approach is based on empirical research, drawing on data from annual sustainability reports published between 2012 to 2014 using 53 sample companies listed on IDX in accordance with GRI disclosure criteria for content analysis. CSR score calculation and regression analysis techniques were used for hypothesis testing with multivariate analysis. The findings confirmed that the influence of social responsibility disclosure was positively related to the cost of equity capital in the previous year and social responsibility disclosure negatively affected the cost of equity capital in firms with good corporate governance. These findings expand on empirical research related to CSR and corporate governance on the cost of equity capital using GRI4 and corporate governance scores in Indonesia context.