Soewandito, Ruby Fatmi. 2011. The Effect of Corporate Social Responsibility Disclosure and Profitability of the Company On Investor Reactions (Studies in the LQ-45 Companies Period 2007-2009). Thesis, Department of Accounting Program Faculty of Economics, StateUniversity ofMalang. Advisor: (I) Ika Putri Larasati, S.E., M.Com, (II) Dr. Puji Handayati, S.E., M.M., Ak.
Key Words: Investor Reactions, Corporate Social Responsibility Disclosure, Profitability of the Company, Legitimacy theory, Signaling theory.
Investor reaction can be expressed in unexpected trading volume. According to Bamber (1996) in Hendrawijaya (2009:30), stock trading volume approach can be used as a proxy for investors reaction. Investors will react if the information received in the market contain a positive value (Jogiyanto, 2000:392). According Kretarto (2001:35) qualitative information based on corporate social responsibility dislosure, while the quantitative information based on financial ratios of profitability ratios are one of Return On Equity (ROE). Legitimacy theory put forward by Lindbolm in Gray (1995: 54) states that the corporate social responsibility disclosure by the company as a part of efforts to gain legitimacy from the public to boost investor reactions. Signaling theory states that the information in the financial statements, which one is financial ratios will assist investors in making investment decisions. Based on these two theories, can be expressed investor reaction is influenced by corporate social responsibility disclosure and corporate profitability information. read more »