THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE ON MARKET REACTION OF FMCG COMPANIES

This research examines the impact of corporate social responsibility disclosure to the market reaction of fast moving consumer goods (FMCG) companies in Indonesia. The method of data collection in this study is documentation of data collection techniques taken from FMCG companies’ annual report in year 2016- 2017. There are 3 (three) variables in this research; Corporate Social Responsibility Disclosure as independent variable, market reaction (cumulative abnormal return) as dependent variable and return on equity (ROE) ratio as the control variable. This research uses GRI as a CSR disclosure indicator. Abnormal returns are calculated using the market adjusted return model. Multiple regression analysis is used to analyze the data. The results show that the disclosure of corporate social responsibility will have positive impact towards companies’ market reaction. It is better for the further research to use other control variables beside the ROE, and to use not only companies’ annual report as the data, but also use the sustainability report to increase the CSR disclosure of the research. The result of this research can be used for the investors to make investment decisions by considering the corporate social responsibility activitie