Company characteristics and risk management disclosure: empirical study of manufacturing companies listed on the Indonesia stock exchange

Abstract

This research aims to obtain empirical evidence on the effect of company characteritics on risk management disclosure (RMD) from the annual reports of manufacturing companies. The sample consists of manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the period 2010–2012. The total sample included 72 companies with three years observation and the examined firms reached 216. Results indicate that independent variables (firm size, profitability, leverage, public ownership, management ownership, and business complexity) have a significant effect on RMD. However, the hypotheses test with partial t-test indicate different results. Firm size (FS) and management ownership (MO) have significant effects, whereas leverage (LEV) has a negative and significant effect on RMD. Other variables, namely profitability (PRO), public ownership (PO), and business complexity (BC), have no significant effect on RMD.