The effects of external stakeholder pressure on CSR disclosure: Evidence from Indonesia

This study examines the effect of external stakeholder pressure on the extent of social and environmental disclosure or corporate social responsibility (CSR) disclosure. Several studies have examined the impact of internal stakeholder pressure (e.g., ownership or board of directors’ structure) and corporate characteristics on CSR disclosure, but there has been little attention focused on the role of external stakeholders. Therefore, this research seeks to examine the influence on the extent of CSR disclosure by four external stakeholder groups: customer, creditor, auditor, and media. A total of 327 annual reports produced by 109 manufacturing companies listed on the Indonesia Stock Exchange from 2013 to 2015 were analyzed. We followed a quantitative approach using STATA 14.2 for data analysis on the regression model and NVivo 11 for data generation to measure the extent of CSR information in each annual report. Results indicate that the external stakeholders (consist of creditor and media exposure) influence the extent of social and environmental disclosure. Although, in the Indonesian context, the pressure from consumers and the auditor is generally weak. An important implication is that the high levels of external stakeholder concern for social and environmental issues will encourage companies to disclose CSR matters extensively.