The Impact of CSR on Company Financial Performance Using Company Size as a Moderator

Widad Nabila  Azzahra; Haasya  Wafdayanti; Hersugondo Hersugondo

Authors

Widad Nabila Azzahra Universitas Diponegoro
Haasya Wafdayanti Universitas Diponegoro
Hersugondo Hersugondo Universitas Diponegoro

Keywords:

Corporate Governance, CSR, Financial Performance, SDGs

Abstract

State governance with sustainable development goals cannot be separated from the SDGs. SDGs are goals, targets and indicators that have been agreed upon by countries associated with the United Nation to determine a country's political agenda and policies. This will have an impact on every activity in the country, including the economic sector. The running of a country’s economy is closely related to the banking industry which manages the flow of funds from the public, so its role in everyday life is very important. As a form of commitment to implementing sustainable economic development, from now on every bank must implement CSR to improving the quality of life and a beneficial environment. The wider CSR activities carried out by banks will indirectly have an impact on the company's customers image so that it can encourage improvements in the banking financial performance. Improving financial performance also influences the preparation of good corporate governance or is known as a moderating factor. This research aims to analyze the influence of CSR on company performance with the moderating role of firm size. Data analysis will use multiple linear regression. This research will use data obtained from the banking industry in Indonesia in the 2018-2022 time period.

Downloads

Download data is not yet available.

References

Avrampou, A., S. A., I. G., & K. N. (2019). Advancing the sustainable development goals: Evidence from leading European banks. 27(4), 743–757.

Brogi, M., & Lagasio, V. (2019). Environmental, social, and governance and company profitability: Are financial intermediaries different? Corporate Social Responsibility and Environmental Management, 26(3), 576–587.

Chakroun, S., Salhi, B., Ben Amar, A., & Jarboui, A. (2020). The impact of ISO 26000 social responsibility standard adoption on firm financial performance. Management Research Review, 43(5), 545–571. https://doi.org/10.1108/MRR-02-2019-0054

Cho, S. J., Chung, C. Y., & Young, J. (2019). Study on the relationship between CSR and financial performance. Sustainability (Switzerland), 11(2).

Ferrero-Ferrero, I., Fernández-Izquierdo, M. Á., & Muñoz-Torres, M. J. (2012). The impact of the board of directors’ characteristics on corporate performance and risk-taking before and during the global financial crisis. Review of Managerial Science, 6(3), 207–226. https://doi.org/10.1007/s11846-012-0085-x

Ghazali, N. A. M. (2007). Ownership Structure and Corporate Social Responsibility Disclosure: Some Malaysian Evidence. Corporate Governance, 251–266.

Gujarati, D. N. (2003). Basic Econometrics: 4th Edition. McGraw-Hill.

Hou, T. C. T. (2019). The relationship between corporate social responsibility and sustainable financial performance: firm-level evidence from Taiwan. Corporate Social

Hunjra, I. A. (2018). Mediating role of dividend policy among its”, Cogent Economics and Finance. Cogent Economics and Finance, 6(1).

Hussain, N., Rigoni, U., & Cavezzali, E. (2018). Does it pay to be sustainable? Looking inside the black box of the relationship between sustainability performance and financial performance. Corporate Social Responsibility and Environmental Management, 25(6), 1198–1211. https://doi.org/10.1002/csr.1631

Ikpor, I. M., Bracci, E., Kanu, C. I., Ievoli, R., Okezie, B., Mlanga, S., & Ogbaekirigwe, C. (2022). Drivers of Sustainability Accounting and Reporting in Emerging Economies: Evidence from Nigeria. Sustainability (Switzerland), 14(7).

Iqbal, S., & Nosheen, S. (2023). Adoption of Sustainable Development Goals and Financial Performance of Banks. Indonesian Journal of Sustainability Accounting and Management, 7(2), 344–360. https://doi.org/10.28992/ijsam.v7i2.744

Kowalewski, O. (2016). Corporate governance and corporate performance: financial crisis (2008). Management Research Review, 39(11), 1494–1515.

Kusumawati, R., Asyilah, N. H., & Bukhori, I. (2022). Corporate Social Responsibility’s (CSR) Impact on Financial Performance: Moderating Effects of Earnings Management and Leverage. Jurnal Manajemen Bisnis, 13(2), 223–234.

Lu, J., & Khan, S. (2023). Are sustainable firms more profitable during COVID-19? Recent global evidence of firms in developed and emerging economies. Asian Review of Accounting, 31(1), 57–85. https://doi.org/10.1108/ARA-04-2022-0102

Preuss, L., P. J. (2010). Slipstreaming the larger boats: social responsibility in medium-sized businesses. Journal of Business Ethics, 92(4), 531–551.

Saleh, M., Z. N. and M. R. (2011). Looking for Evidence of the Relationship between Corporate Social Responsibility and Corporate Financial Performance in an Emerging Market. Asia-Pacific Journal of Business Administration, 3, 165–190.

Sánchez-Infante Hernández, J. P., Yañez-Araque, B., & Moreno-García, J. (2020). Moderating effect of firm size on the influence of corporate social responsibility in the economic performance of micro-, small- and medium-sized enterprises. Technological Forecasting and Social Change, 151. https://doi.org/10.1016/j.techfore.2019.119774

Stuart, M., Spencer, D. A., McLachlan, C. J., & Forde, C. (2021). COVID-19 and the uncertain future of HRM: Furlough, job retention and reform. In Human Resource Management Journal (Vol. 31, Issue 4, pp. 904–917). John Wiley and Sons Inc. https://doi.org/10.1111/1748-8583.12395

Tawfik, O. I., Kamar, S. H., & Bilal, Z. O. (2021). The Effect of Sustainable Dimensions on the Financial Performance of Commercial Banks: A Comparative Study in Emerging

Waheed, A., & Yang, J. (2019). Effect of corporate social responsibility disclosure on firms’ sales performance: A perspective of stakeholder engagement and theory. Corporate Social Responsibility and Environmental Management, 26(3), 559–566. https://doi.org/10.1002/csr.1701

Wang, J., Zhang, Y., & Goh, M. (2018). Moderating the role of firm size in sustainable performance improvement through sustainable supply chain management. Sustainability (Switzerland), 10(5). https://doi.org/10.3390/su10051654

Widagdo, A. K., Murni, S., Nurlaela, S., & Rahmawati. (2021). Corporate social responsibility, earnings management, and firm performance: Are the companies really ethical? IOP Conference Series: Earth and Environmental Science, 824(1). https://doi.org/10.1088/1755-1315/824/1/012118