Carbon Emissions, Firm Size, and Corporate Governance Structure: Evidence from the Mining and Agricultural Industries in Indonesia
Sustainability, April 2019
14 Pages Posted: 21 Apr 2020
Date Written: 2019
The purpose of this research was to examine the relationship between firm size, corporate governance, and carbon emission disclosure (CED) in Indonesia, a country with rich natural resources.This study focused on the mining and agricultural industries to better capture the disclosure behavior of companies directly engaged in natural resources. Using a sample of 305 firm-year observations of listed firms in Indonesia spanning from 2011 to 2016, the results show that larger firms and firms with larger board sizes are more likely to have higher disclosure on CED. We also showed that firms with a higher percentage of independent commissioners and directors are less likely to disclose information related to carbon emissions. These findings indicate that a greater number of commissioners and directors sitting on the board will stimulate a firm’s decision to make a higher number of disclosures related to carbon emissions. However, the increased percentage of independent commissioners and directors will cause more conservative disclosure outcomes to the firms. In addition, firms in the mining industry are more likely to have a higher level of CED relative to firms in the agricultural industry. These findings remained robust even after we corrected the standard errors.
Keywords: Carbon Emission Disclosure, Firm Size, Corporate Governance Structure, Mining
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