Social Responsibility Disclosure and its Effect on the Cost of Equity for Services Companies Listed on Amman Stock Exchange

Abstract

The study aims to identify the disclosure of social responsibility and its impact on the cost of equity rights for public shareholding service companies listed on the Amman Stock Exchange. By identifying the impact of each social responsibility activities in terms of community service, human resource development, environmental resource development, and upgrading of services and products in the cost of equity rights
To achieve the objectives of the study and analysis the data collection, the study uses content analysis method to analysis the annual reports issued by the companies. The study also uses the method of multiple regression analysis to test the hypotheses. The study sample consisted of (17) companies from the study society, (54) service companies. The total of observations is 187 during the period 2006-2016.
Based on the analysis, the study concludes the following results: there is no significant effect for the disclosure of the social responsibility for activities related to community service and human resources development activities in the cost of equity rights. The results also show a significant effect for both activities related to the development of environmental resources and activities. Finally, the study pointes out to the difference in the level of disclosure of social responsibility dimensions on the cost of equity rights due to the size and profitability of the companies.
The study sets several recommendations for the companies, the most important is the need to draw attention to activities related to social responsibility that have significant impact on the cost of equity rights, especially the activities related to upgrading products and services and developing environmental resources.

Keywords: social responsibility activities, cost of capital, cost of equity.