Leverage Moderator of Carbon Emission Disclosure, Corporate Social Responsibility, and Firm Size on Profitability
Keywords:
Carbon Emission Disclosure; Corporate Social Responsibility; Firm Size; Leverage; ProfitabilityAbstract
This study examines the effect of Carbon Emission Disclosure, Corporate Social Responsibility, and firm size on profitability, with leverage as a moderating variable, in manufacturing companies listed on the Indonesia Stock Exchange during the 2022-2024 period. This study employs a quantitative approach using secondary data obtained from annual reports and sustainability reports, resulting in 153 firm-year observations selected through purposive sampling. Data were analyzed using Moderated Regression Analysis (MRA) with IBM SPSS. The results show that Carbon Emission Disclosure and Corporate Social Responsibility have a positive and significant effect on profitability, while firm size has no significant effect. Leverage does not moderate the relationship between Carbon Emission Disclosure and firm size on profitability; however, leverage weakens the relationship between Corporate Social Responsibility and profitability. This finding is consistent with Trade-off Theory, which suggests that high leverage increases fixed financial obligations such as interest payments, thereby limiting a firm’s financial flexibility to maximize the economic benefits of CSR activities. These results provide insights into how sustainability disclosure and capital structure interact in influencing corporate profitability.
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