Sustainability Concern and Investor Responses on Earnings Announcement

Akhmad Riduwan(1), Andayani Andayani(2),


(1) Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya, Department of Accounting, Surabaya, Indonesia
(2) Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya, Department of Accounting, Surabaya, Indonesia

Abstract

This study aims to examine the effect of corporate sustainability concern on investor responses to earnings announcement (earnings response coefficient). The study was conducted on 110 companies that carry out sustainability disclosures based on the Global Reporting Initiative standards, in the 2008-2017 observation period. With multiple linear regression models, the results of the study show that the company's concern for sustainability aspects of economic, environmental, and social has a positive effect on investor responses to earnings announcements. The results of this study imply that investors have the awareness and confidence that financial performance that will manifest as an investment return is not an instant goal, but must be sustainable in the long term. Investors are aware that investment returns, directly or indirectly, are influenced by social stability and environmental sustainability.

Keywords

financial performance, disclosure, earnings response coefficient, Global Reporting Initiative, sustainability

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DOI: https://doi.org/10.28992/ijsam.v3i2.96

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