Carbon Emission Disclosure and Capital Structure: The Moderating Role of Audit Committee Size

Articles in Press

Document Type : Original Article

Authors

Adri Putra Nugraha

Rizka N Fitriasari

Department of Accounting, Faculty of Economics and Business, Universitas Brawijaya, Malang, Indonesia

10.22067/ijaaf.2026.100207.1720

Abstract

This study examines whether carbon emission disclosure (CED) is associated with corporate leverage and whether audit committee governance conditions that association. Using a balanced panel of Indonesian listed manufacturing firms, the study applies firm and year fixed effects with firm-clustered standard errors and supplements the main analysis with lagged-disclosure, dynamic-panel, and difference-GMM sensitivity checks. CED is positively associated with leverage in the preferred fixed-effects models, while audit committee size does not significantly strengthen that association. Alternative governance measures based on independence, financial expertise, meeting activity, and a composite governance index also show no detectable moderation. The positive CED association persists in the lagged and dynamic fixed-effects specifications but becomes statistically imprecise under difference GMM. The results therefore support a positive conditional association rather than a definitive causal effect. They also indicate that observable audit committee structure does not provide robust evidence of stronger CED-leverage transmission within firms. These conclusions remain unchanged under finite-cluster inference and multiple-testing adjustments, although the short panel and limited within-firm governance variation constrain power and causal interpretation.

Keywords

Audit Committee Size

Capital Structure

Carbon Emission Disclosure

Corporate Governance

Emerging Market

Subjects

• Finance

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