The Influence of Corporate Social Responsibility on Financial Performance with Good Corporate Governance as Moderating Variable

Narwastu Narwastu; Devvy Rusli

doi:10.58777/rfb.v1i1.35

Authors

Narwastu Narwastu Sekolah Tinggi Ilmu Ekonomi Indonesia, Jakarta
Devvy Rusli Sekolah Tinggi Ilmu Ekonomi Indonesia

DOI:

https://doi.org/10.58777/rfb.v1i1.35

Keywords:

Corporate Social Responsibility, Good Corporate Governance, Financial Performance

Abstract

This study aims to determine the effect of Corporate Social Responsibility on financial performance moderated by Good Corporate Governance in construction and building sub-sector companies listed on the Indonesia Stock Exchange for the 2019-2021 period. The quantitative methodology was used in this study. Construction and building companies listed on the Indonesia Stock Exchange for 2019 through 2021 comprise this study's population. Purposive sampling was used for the study's sampling, which produced final sample of 13 businesses. The information used in this study is secondary data. The results of this study indicate that: (1) economic dimension information has a significant positive effect on financial performance, (2) environmental dimension information has significant negative effect on financial performance, (3) social dimension information has insignificant negative effect on financial performance, (4) GCG can moderate the relationship of information on the environmental dimension to financial performance (5) GCG cannot moderate the relationship between information on the economic dimension and information on the social dimension on financial performance. In increasing firm value, research implications for companies should always be consistent in disclosing CSR information and the implementation of GCG to avoid problems that can lower the image company in the eyes of investors and the public.

References

Ainy, RN, & Barokah, Z. (2019). Corporate Governance, Environmental Responsibility, and Firm Value: An Empirical Study in Indonesia and Malaysia. Journal of Accounting and Investment, 20(2), 59–75. https://doi.org/10.18196/JAI.2002117

Aprilia, N. I., & Rahayu, S. I. (2023). The Influence of Corporate Social Responsibility (CSR) Disclosures, Accounting Conservatism, and Leverage on Earnings Response Coefficient (ERC). Research of Accounting and Governance, 1(1), 43–52. https://doi.org/10.58777/rag.v1i1.14

Ariesanti, A. (2017). The Relations among Environmental Performance, Environmental, and Firm Performance. The Indonesian Journal of Accounting Research, 20(1), 99–116. https://doi.org/10.33312/ijar.348

Aspan, H. (2017). Good Corporate Governance Principles in the. International Journal of Law Reconstruction, 1(1), 87–100.

Bukhori, MRT, & Sopian, D. (2017). Information Systems, Finance, Auditing, and Taxation. Attitude, 2(1), 20–34.

Choi, BB, Lee, D., & Psaros, J. (2013). An Analysis of Australian Company Carbon Emission Disclosures. Pacific Accounting Review, 25(1), 58-79.

Clarissa, SV, & Ketut Rasmini, N. (2018). The Effect of Sustainability Report on Financial Performance with Good Corporate Governance Quality as a Moderating Variable. International Journal of Sciences: Basic and Applied Research (IJSBAR) International Journal of Sciences: Basic and Applied Research, 40(2), 139–149.

Deegan, C., and Rankin, M. (1996). Do Australian Companies Report Environmental News Objectively? An Analysis of Environmental Disclosures By Firms Prosecuted Successfully By The Environmental Protection Authority. Accounting, Auditing and Accountability Journal, 9(2): 52-69.

Forum for Corporate Governance in Indonesia (FCGI). (2001). Corporate Governance: Corporate Governance. Third Edition. Jakarta. FCGI

Jensen, M.C, & Meckling, W.H. (1976). Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure. Journal of Financial Economics, 305-360.

Kristen, LA, & Werastuti, DNS (2020). Effect of Environmental and Social Performance on Financial Performance With Good Corporate Governance as Moderating Variable. JIMAT (Journal of Scientific, 1(2), 487–498. https://ejournal.undiksha.ac.id/index.php/S1ak/article/view/26619

Mariani, E., & Fithri, WN (2017). Corporate Social Responsibility, Good Corporate Governance, Environmental Performance on Financial Performance and Its Effect on Company Value. Journal of Accounting Science, 1(1), 21–37. https://doi.org/10.21070/jas.v1i1.773

Mukhtaruddin, M., Ubaidillah, U., Dewi, K., Hakiki, A., & Nopriyanto, N. (2019). Good Corporate Governance, Corporate Social Responsibility, Firm Value, and Financial Performance as Moderating Variable. Indonesian Journal of Sustainability Accounting and Management, 3(1), 55. https://doi.org/10.28992/ijsam.v3i1.74

Nurfitriani, M., & Wahyudi, I. (2021). The Effect Of Disclosure Of CSR Dimensions On Financial Performance And Its Impact On Company Value On Banking In Indonesia Stock Exchange And Malaysia Stock Exchange 2017-2019. Jambi University Journal of Accounting and Finance, 6(3), 164–178.

Pham, H.S.T, & Tran, H.T. (2020). CSR Disclosure And Firm Performance: The Mediating Role Of Corporate Reputation And Moderating Role Of CEO Integrity. Journal Of Business Research, 12(2), 127–136. https://doi.org/10.1016/j.jbusres.2020.08.002

Rezaee, Z., & Tuo, L. (2017). Are The Quantity And Quality Of Sustainability Disclosures Associated With The Innate And Discretionary Earnings Quality? Journal of Business Ethics, 155(3), 763-786.https://doi.org/10.1007/s10551-017-3546

Santosa, P. W. (2019). Financial performance, exchange rate and stock return: Evidence from manufacturing sector. Jurnal Manajemen Teknologi, 18(3), 205–217. https://doi.org/10.12695/jmt.2019.18.3.5

Santosa, P. W., & Hidayat, A. (2014). Riset Terapan: Teori dan Aplikasi (First Edit). Globalstat Solusi Utama.

Santosa, P. W., Setianingrum, A., & Yusuf, C. (2022). Corporate governance and leverage on firm value : Evidence of Indonesian large firms. Jurnal Keuangan Dan Perbankan, 26(4), 862–873. https://doi.org/10.26905/jkdp.v26i4.7764

Santosa, P. W., Tambunan, M. E., & Kumullah, E. R. (2020). The role of moderating audit quality relationship between corporate characteristics and financial distress in the Indonesian mining sector. Investment Management and Financial Innovations, 17(2), 88–100. https://doi.org/10.21511/imfi.17(2).2020.08

Sugiarto, M., & Santosa, P. W. (2018). Pengaruh indikator makroekonomi, kinerja keuangan, dan tata kelola terhadap nilai perusahaan sektor properti di bursa efek Indonesia. Journal of Economics and Business Aseanomics, 2(2), 288–312. https://doi.org/https://doi.org/10.33476/jeba.v2i2.487

Sugiyono. (2018). Business Research Methods Quantitative, Qualitative, Combination, and R&D Approaches. Bandung: Alfabeta.

Tuan, N. Van, & Tuan, N. A. (2016). Corporate Governance Structures and Performance of Firms in Asian Markets: a Comparative Analysis Between Singapore and Vietnam. Organizations and Markets in Emerging Economies, 7(2), 112–140. https://doi.org/10.15388/omee.2016.7.2.14210

WBCSD (World Business Council for Sustainable Development). (2008). Corporate Social Responsibility: Meeting Changing Expectations. http://www. wbcsd.org.

Yanto, E. (2018). Effect of Corporate Social Responsibility and Good Corporate Governance on the Value of Company with Profitability as Moderating Variables. JAAF (Journal of Applied Accounting and Finance), 2(1), 36–49. https://doi.org/10.33021/jaaf.v2i1.304

Zhang, N. (2022). How does CSR of food company affect customer loyalty in the context of COVID-19: a moderated mediation model. International Journal of Corporate Social Responsibility, 7(1), 1–10. https://doi.org/10.1186/s40991-021-00068-4

Zheng, P., & Ren, C. (2019). Voluntary CSR disclosure, institutional environment, and independent audit demand. China Journal of Accounting Research, 12(4), 357–377. https://doi.org/10.1016/j.cjar.2019.10.002