Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship?
With a purpose to give a deep understanding relating to the manifestation of social responsibilities practices among Indonesian companies, this paper reflects the relationship of corporate social responsibility (CSR), corporate profitability (CP), value creation (VC) and good corporate governance (G...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2019-06-01
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| Series: | Investment Management & Financial Innovations |
| Subjects: | |
| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12143/IMFI_2019_02_Tarigan.pdf |
| _version_ | 1826907558035587072 |
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| author | Josua Tarigan Saarce Elsye Hatane Linneke Stacia Deborah Christine Widjaja |
| author_facet | Josua Tarigan Saarce Elsye Hatane Linneke Stacia Deborah Christine Widjaja |
| author_sort | Josua Tarigan |
| collection | DOAJ |
| description | With a purpose to give a deep understanding relating to the manifestation of social responsibilities practices among Indonesian companies, this paper reflects the relationship of corporate social responsibility (CSR), corporate profitability (CP), value creation (VC) and good corporate governance (GCG). Kinder, Lydenberg, and Domini’s (KLD) measurement approach is used in this study to measure the social responsibility practices, as this gives cross-border analysis of social responsibility. Corporate profitability captures return on assets, which is accounting-based measurement, whereas value creation explains the economic value added, which is shareholder-based measurement. Structural Equation Model (SEM) analysis is conducted for Indonesian listed companies, which appeared in Corporate Governance Perception Index (CGPI). The empirical result suggests that CSR serves as a tool in assisting shareholders value and performance. Accordingly, firms should incorporate CSR practices to enhance its strategic investment and sustain a strong relationship with its stakeholders. Subsequently, management should also take concern of having good corporate governance in order to improve company’s performance by supervising and monitoring of the company’s operation, ensure the fulfillment to the stakeholder’s interest. This paper presents fresh insights into applications of corporate social responsibility principles and corporate governance in Indonesian context that has not received systematic attention and consideration in the literature. |
| first_indexed | 2024-12-22T05:29:56Z |
| format | Article |
| id | doaj.art-e41eb41cbc394c00a466d1e05397c396 |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2025-02-17T09:08:39Z |
| publishDate | 2019-06-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-e41eb41cbc394c00a466d1e05397c3962025-01-02T16:15:17ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582019-06-0116227028010.21511/imfi.16(2).2019.2312143Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship?Josua Tarigan0Saarce Elsye Hatane1Linneke Stacia2Deborah Christine Widjaja3Dr., Department of Accounting, , Petra Christian UniversityMBA, Department of Accounting, Petra Christian UniversityBBA, Department of Accounting, Petra Christian UniversityDr., Petra Christian UniversityWith a purpose to give a deep understanding relating to the manifestation of social responsibilities practices among Indonesian companies, this paper reflects the relationship of corporate social responsibility (CSR), corporate profitability (CP), value creation (VC) and good corporate governance (GCG). Kinder, Lydenberg, and Domini’s (KLD) measurement approach is used in this study to measure the social responsibility practices, as this gives cross-border analysis of social responsibility. Corporate profitability captures return on assets, which is accounting-based measurement, whereas value creation explains the economic value added, which is shareholder-based measurement. Structural Equation Model (SEM) analysis is conducted for Indonesian listed companies, which appeared in Corporate Governance Perception Index (CGPI). The empirical result suggests that CSR serves as a tool in assisting shareholders value and performance. Accordingly, firms should incorporate CSR practices to enhance its strategic investment and sustain a strong relationship with its stakeholders. Subsequently, management should also take concern of having good corporate governance in order to improve company’s performance by supervising and monitoring of the company’s operation, ensure the fulfillment to the stakeholder’s interest. This paper presents fresh insights into applications of corporate social responsibility principles and corporate governance in Indonesian context that has not received systematic attention and consideration in the literature.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12143/IMFI_2019_02_Tarigan.pdfCorporate Governance Perception Indexeconomic value addedKinderLydenberg and Domini’sreturn on assets |
| spellingShingle | Josua Tarigan Saarce Elsye Hatane Linneke Stacia Deborah Christine Widjaja Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship? Investment Management & Financial Innovations Corporate Governance Perception Index economic value added Kinder Lydenberg and Domini’s return on assets |
| title | Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship? |
| title_full | Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship? |
| title_fullStr | Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship? |
| title_full_unstemmed | Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship? |
| title_short | Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship? |
| title_sort | corporate social responsibility policies and value creation does corporate governance and profitability mediate that relationship |
| topic | Corporate Governance Perception Index economic value added Kinder Lydenberg and Domini’s return on assets |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/12143/IMFI_2019_02_Tarigan.pdf |
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