An alignment effect of concentrated and family ownership on carbon emission performance: The case of Indonesia

Abstract

This study considers the effect of ownership characteristics on carbon emission disclosures using balanced panel data and a matched-pair design of 124 annual reports of non-financial firms listed on the Indonesia Stock Exchange (IDX) during 2017–2019. The main result from multivariate analysis reveals that firms with concentrated and family ownership tend to disclose more carbon emission information. This finding suggests that the stewardship qualities of concentrated and family-controlled entities align with carbon emission accountability and strategies to reduce emissions. Our additional analyses show that firms with family board members generate more carbon emission information. Finally, the analysis of nonlinear relationships confirms both monitoring and expropriation effects of family ownership on carbon emission performance. Therefore, the results of this study suggest that considerable work is needed for all non-financial listing firms to specify emission reduction targets and target years, quantify emission reductions and associated costs or savings, and factor costs of future emissions into capital expenditure planning. This study makes a valuable contribution to the family business and carbon emissions, a contribution of considerable interest to a broad interdisciplinary audience, including family business owners, managers, governments, and academics.

Keywords:

• Ownership characteristics
• family-controlled firm
• carbon emission disclosure
• stewardship theory
• Indonesia

Correction

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. To ensure data homogeneity, this study focuses on non-financial firms identified in the IDX. The reason for employing non-financial companies is that these companies are dominant in Asia, especially, the Indonesian economy (Dhawan et al., 2000).

2. Our independent-samples t-test (results not included for brevity) reveals that the means of total assets of family and non-family firms are not significantly different.

Additional information

Funding

The authors received no direct funding for this research.

Notes on contributors

Achsanul Qosasi

Achsanul Qosasi is a board member of the Audit Board of the Republic of Indonesia. He has also participated in several major businesses and professional social groups in Indonesia. In addition, he has received numerous prestigious national and international awards. Achsanul completed his doctorate in business administration at Padjadjaran University, Indonesia.

Hendra Susanto

Hendra Susanto (co-author) is a board member of the Audit Board of the Republic of Indonesia. He graduated from Sriwijaya University in 1997 with a bachelor’s degree in civil engineering. He completed a master’s degree in International Institute of Infrastructure, Hydraulic, and Environmental Engineering, Delft, The Netherlands, in 2004. Then, he accomplished a master of business law degree at Gajah Mada University in 2016. Later, he completed a doctoral degree in accounting from the Economics and Business Program, Padjadjaran University, in 2019, with the research subject of digital forensic study. He also holds a certified fraud auditor and a certified state finance auditor. His specialization is investigative and forensic audits. He was primarily engaged in performing public works and infrastructure audits. In addition, he was an expert in numerous cases in court.

Rusmin Rusmin

Rusmin Rusmin (corresponding author) is a faculty member at Universitas Teknologi Yogyakarta. Rusmin completed his auditing and financial accounting doctorate at Curtin University, Australia. He has published research papers in journals such as the Managerial Auditing Journal, International Journal of Public Administration, International Journal of Accounting and Information Management, The International Journal of Accounting, Auditing, and Performance Evaluation, and Asia Review of Accounting. His primary interests are auditing, corporate governance, earnings management, and environmental management.

Emita W. Astami

Emita W. Astami (co-author) holds a Ph.D. in accounting from Curtin University, Australia, and has been on the faculty at Universitas Teknologi Yogyakarta. She has conducted research in the areas of corporate governance, financial reporting, and financial and environmental disclosures. She has published research papers in journals such as the International Journal of Accounting, Asian Review of Accounting, International Journal of Accounting and Information Management, and Australasian Accounting Business and Finance Journal.

Alistair Brown

Alistair Brown (co-author) teaches and researches at the School of Accounting, Economics & Finance at Curtin University, Western Australia. His Web of Science Researcher ID is U-4009-2018, and his Scopus ID is 0000-0002-4529-9099.