CSR & Performance: Any Evidence from Indonesian LQ45?

RIBER: Review of Integrative Business & Economics Research, April 2013, Volume 2, Issue 1, p. 85-101 (ISSN: 2304-1013)

17 Pages Posted: 20 Feb 2013 Last revised: 13 Dec 2019

See all articles by Saffana Afiff

Saffana Afiff

Swiss German University

Samuel P. D. Anantadjaya

International University Liaison Indonesia (IULI)

Date Written: April 1, 2013

Abstract

This research investigates the corporate social responsibility (CSR) and firm financial performance. The CSR and firm financial performance are gathered and calculated from the annual reports and managerial reports of publicly-listed firms in the LQ45 of the Indonesian Stock Exchange. These collections of firms in LQ45 represent the most liquid firms across industries.

The sampling process began with searching for the accurate information on total numbers of publicly-listed firms in LQ45 during the period of 2004-2011. In order to investigate how the CSR affects stock prices, 13 firms were selected due to their consistency in performance, which make them constantly appear in LQ45 from 2004-2011. Based on the available data, regression analysis is utilized in this study.

The results indicated that CSR employee, CSR community, size, profitability, and leverage have significant effect on stock price. It prescribed that firms may want to pay more attention onto CSR initiatives, particularly toward employee and community. The other significant variables toward stock price, which were profitability, size, and leverage, prescribed that firms may want to notice their selected financial indicators. Hence, it is safe to conclude that there were sufficient evidences, which indicated that CSR influenced the level of firm’s performance.

Keywords: corporate social responsibility, CSR, firm financial performance, financial crisis, panel data estimation

JEL Classification: L20, L60, M14, M10

Suggested Citation

Afiff, Saffana and Anantadjaya, Samuel P. D., CSR & Performance: Any Evidence from Indonesian LQ45? (April 1, 2013). RIBER: Review of Integrative Business & Economics Research, April 2013, Volume 2, Issue 1, p. 85-101 (ISSN: 2304-1013) , Available at SSRN: https://ssrn.com/abstract=2220242

Saffana Afiff

Swiss German University ( email )

EduTown, BSD City
Serpong, Tangerang 15339
Indonesia

Samuel P. D. Anantadjaya (Contact Author)

International University Liaison Indonesia (IULI) ( email )

Eco Campus, The Breeze
BSD City
Serpong, Tangerang, Banten 15345
Indonesia
+62-21-5058-8000 (Phone)

HOME PAGE: http://www.iuli.ac.id

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