The Determinants of Islamic Social Reporting Disclosure in Indonesia

Abstract

Objective – The purpose of this research is to identify the relationship between corporate performance, Good Corporate Governance (GCG), and corporate characteristics on Islamic Social Reporting disclosure in Indonesia.

Methodology/Technique – A quantitative approach is applied in this research. The sample of this study consists of companies that were consistently listed on the Jakarta Islamic Index (JII) from 2012 to 2017. A purposive sampling method with certain criteria was employed to produce a total of 72 samplings. Partial Least Square (PLS) was also used to analyse the data.

Findings – The results of this research indicate that corporate performance has a positive and significant effect on ISR disclosure, GCG has a positive and significant effect on ISR disclosure, and corporate characteristics have a negative and insignificant effect on ISR disclosure.

Novelty – Islamic Social Reporting is the answer and solution to the needs of the interested parties concerned with the company's financial statements. ISR becomes a very important thing for the reputation and performance of Islamic financial institutions. Islamic financial institutions that succeed in revealing their ISR value will be perceived as a reliable entity by the Muslim community in channeling their fund.

Type of Paper – Empirical.

Keywords: Islamic Social Reporting; Corporate Performance; Good Corporate Governance; Corporate Characteristics

JEL Classification: M40; M41; M49