SOCIAL AND ENVIRONMENTAL RESPONSIBILITY IN DEVELOPING COUNTRIES: A THEORETICAL APPROACH TO REGULATION

Abstract

This study aims to analyze and describe the social and environmental responsibility of
companies listed on the stock exchange in three developing countries, namely Indonesia, Malaysia, and
Thailand, before and after 2007. In 2007 chosen as the cut-off year of observation as we find in each country
was issued a significant environmental policy. By doing a differential test on a sample of 24.626 independent
firms/years, the study found that four variables used in this study overall showed a significant difference.
Environmental costs, the disclosure of environmental, social disclosure, and ESG that observed in three
developing countries has increased significantly after 2007. However, we did not find a significant increase
in environmental costs in Indonesia. The findings of this study indicate that the theory of regulation,
particularly for public interest theory, can explain clearly the reasons why the four variables research has
increased after the environmental regulations issued.