Syntax Literate: Jurnal Ilmiah Indonesia p–ISSN: 2541-0849
e-ISSN: 2548-1398
Vol. 8, No. 12, Desember 2023
THE MODERATING EFFECT OF
OWNERSHIP STRUCTURE IN AFFECTING CSR ON FINANCIAL PERFORMANCE
Vania Aqila Lituhayu, Arief Wibisono Lubis
Faculty of Economics and Business, University of Indonesia, Jakarta
Email: [email protected]
Abstract
CSR activities are becoming a trend that
companies do to be able to compete in increasingly fierce business competition.
The company's consistency in carrying out CSR activities can influence the
profits generated by the company, which is shown by the company's financial
performance. However, some factors can influence CSR on financial performance,
one of which is ownership structure. The company's managerial ownership
structure will have an impact on how well business decisions are made. The
ownership identity applied by the company will support management
decision-making in implementing CSR efforts and improving financial
performance. This study was conducted to examine the effect of ownership
structure as a moderating variable on the relationship between corporate social
responsibility and financial performance in companies located in Indonesia and
Singapore. Furthermore, it was also tested by comparing CSR disclosures in the
two countries by focusing on companies listed on the LQ45 index and the Straits
Times Index. The test analysis uses panel data regression analysis and the
Mann-Whitney test to determine the level of difference in CSR in Indonesia and
Singapore. The results obtained are that there is no significant difference in
CSR between Indonesian and Singaporean companies. Furthermore, the role of
ownership structure in strengthening the relationship between CSR and financial
performance can be proven in Singapore companies, but cannot be proven in
Indonesian companies.
Keywords: CSR, financial performance, managerial ownership, ownership structure
Introduction
Corporate social responsibility (CSR) represents
the actions of corporations related to sustainability, environmental impact,
and social performance (Garanina & Kim, 2023). A recent survey conducted by
KPMG (2020) reveals that a staggering 96% of the world's large firms have
published Corporate Social Responsibility (CSR) reports for public consumption.
However, there is a concern regarding whether the rapid growth in CSR reporting
truly indicates an enhanced level of responsibility among public companies, or
if it is simply the adoption of symbolic strategies where companies prioritize
their perceived legitimacy over actual societal impact (Garanina & Kim, 2023).
The ASEAN CSR Network (ACN), a regional
organization that promotes corporate social responsibility (CSR) in the ASEAN
area, assessed six ASEAN countries with the highest CSR scores. The six
countries are Singapore, Malaysia, Indonesia, Thailand, the Philippines, and
Vietnam. In 2020, ACN conducted an assessment based on several criteria,
including information transparency, detailed disclosure of CSR activities, and
CSR performance. The better companies in each country disclose their CSR activities,
the higher the percentage of assessment they will receive.
The report states that on average, just 47% of
companies from the six countries have effectively implemented the principles of
accountability and transparency about how companies are responsible for openly
disclosing their CSR activities. According to the assessment conducted by ACN,
Singapore is the country with the highest level of CSR disclosure, amounting to
69%. Indonesia ranks fifth, following Thailand, in expressing its social responsibility
activities with a score of 36%.
According to Chang (2021), corporate social responsibility (CSR)
initiatives have the potential to reflect the efficacy of business profits as
indicated by financial statements. By examining the financial performance
resulting from these activities, it becomes possible to ascertain whether there
is a discernible improvement when they are executed well. According to Ibrahim (2015), the provision of comprehensive and accurate
corporate social responsibility (CSR) information can have a positive impact on
investor interest and community loyalty.
This, in turn, can influence financial
management and sales value, ultimately leading to improvements in overall
financial performance. Han (2016) propose that the effective implementation of
corporate social responsibility (CSR) activities by a firm, along with a strong
commitment to transparently disclosing information about its social
initiatives, can provide positive outcomes for its financial performance.
However, in contrast
to the findings of Fahad & Busru (2021), the present study indicates
that corporate social responsibility (CSR) initiatives do not have a
significant impact on the financial success of the organization. The presence
of divergent and incongruous outcomes gives rise to the notion that multiple
variables may impact the evaluation of financial performance and the assessment
of corporate social responsibility (CSR) activities. These factors can
contribute to inconsistent findings in research endeavors that examine the
direct correlation between CSR and financial performance.
Kabir & Thai (2017) assert that corporate governance
elements exert a significant influence on the association between corporate
social responsibility (CSR) and financial success. The relationship between
corporate social responsibility (CSR) and financial performance can be
influenced by the implementation of corporate governance mechanisms that
regulate ownership structure.
The influence of
ownership structure considerations on a company's financial success can be
significant. The ownership structure of a corporation plays a crucial role in
shaping its corporate governance procedures since it has the potential to
influence the distribution of governance power within the organization (Ang,
Shao, Liu, Yang, & Zheng, 2022).
The application of
corporate governance known as ownership structure pertains to the allocation of
ownership, control rights over shares, and distribution of firm resources. The
efficacy of corporate decision-making can be influenced by the specific
organizational management approach implemented by a corporation. The
implementation of ownership identification by the company would assist managers
in making informed decisions regarding the execution of corporate social
responsibility activities, thereby contributing to the enhancement of financial
performance.
The purpose of this
study is to determine the effect of corporate social responsibility (CSR) on
financial performance which will also be tested for the moderating role of
ownership structure. The focus of this study is companies located in Indonesia
and companies located in Singapore. As stated earlier in the assessment of CSR
disclosure conducted in six ASEAN countries conducted by ASEAN CSR Network
(2020), Singapore became the country with the highest score in CSR disclosure.
The comparison between Indonesian and Singaporean companies is carried out to
know how CSR activities are carried out by companies and to know the
implementation of governance so that it can affect the relationship between CSR
and financial performance.
Research
Methods
The population that is the object of research
consists of companies listed on the LQ45 index from the Indonesia Stock
Exchange (IDX) and STI from the Singapore Exchange (SGX) with a data period
from 2018 to 2022. In determining the research sample, researchers used the
purposive sampling method. Determination of criteria by the research objectives
is a technique used so that the research sample can be collected by the
research design. After the sampling, the total sample size is 44 companies (22
Indonesian companies and 22 Singapore companies).
This study measures the disclosure of CSR based
on the Global Reporting Initiatives (GRI) standards. GRI has developed
sustainability reporting standards that may be utilized by organizations from
many sectors to measure and report their performance in terms of economic,
environmental, and social aspects (GRI ASEAN, 2022). The scoring system is
employed to measure CSR disclosure using the Global Reporting Initiative (GRI).
The scoring methodology involves assigning a score of 1 when the company has
revealed the relevant indicator, and a score of 0 when it has not. The final
score for CSR disclosure is determined by dividing the total score of
indicators disclosed by the company by the total number of applicable GRI
indicators and expressing it as a percentage.
This study primarily examines the profitability
ratio as a measure of financial performance, which assesses the company's
capacity to generate profit within a specific timeframe. Profitability ratios
are metrics utilized to evaluate the financial success of a firm in generating
profits, by establishing a connection between these earnings and sales, assets,
or company capital (Prihadi, 2010). The profitability ratio in this study will be
projected with ROA and ROE.
Return on Assets is a financial ratio used to
assess a company's ability to generate profits from its assets (Prihadi, 2010). ROA is measured by summing the net income of a
company by its total assets (Diana, 2018). Return on Equity is a financial metric that
measures the profitability of a firm by examining the profits generated from
the capital invested in the company (Syamsuddin, 1987). The ROE value is obtained by summing the net
income by the total equity owned by the company. This study additionally
employs control factors to avoid any bias when analyzing the association between
the variables. The appropriate control variables are shown in Table 1.
Table 1 Variable Measurement
|
Variable |
Indicator |
Variable Definition |
Source |
|
|
Independent
Variable |
||||
|
Corporate Social Responsibility |
Corporate Social Responsibility
Disclosure |
CSRD |
The ratio of CSR activities disclosed by
the company to the total number of applicable GRI indicators. |
(Putra
et al., 2015) |
|
Moderating
Variable |
||||
|
Ownership Structure |
Managerial Ownership |
MOWN |
The ratio of the number of shares owned
by management to the number of outstanding shares. |
Yasser
& Mamun (2017) |
|
Dependent
Variable |
||||
|
Financial Performance |
Return on Assets |
ROA |
The ratio of net income to total assets. |
Hayat
et al. (2018) |
|
Return on
Equity |
ROE |
The ratio of net
income to total equity. |
||
|
Control Variable |
||||
|
Size |
Firm Size |
SIZE |
Natural logarithm
of total assets. |
Kabir & Thai (2017) |
|
Leverage |
Firm Leverage |
LEV |
The ratio of total debt to total equity. |
Hasan
et al. (2022) |
|
Covid |
Covid-19
Pandemic |
COV |
The period the
company began to be affected by the Covid-19 pandemic. |
Aljughaiman et al. (2023) |
|
Board Size |
Board Size |
B-SIZE |
Natural logarithm of the total number of
board members. |
Ang
et al. (2022) |
|
Growth |
EPS
Growth |
GROWTH |
Growth in
earnings per share. |
|
|
Liquidity |
Liquidity |
LIQ |
The ratio of current assets to current
liabilities. |
|
This study generates four empirical
models by combining the prior research hypotheses with the variable selection.
These four models will be analyzed with panel data regression analysis. Panel
data regression is an analysis method that combines two types of data, namely
time series data and cross-section data (Basuki & Prawoto, 2016). Time series data is obtained by observing an
individual over time. Cross-section data includes information from various
individuals at a certain point in time. In this study using panel data
regression, researchers analyzed the direct effect of CSR disclosure as an
independent variable on financial performance as the dependent variable, as
well as the role of ownership structure as a moderating variable.
First, this study explores the direct
impact of CSR on financial performance (ROA and ROE) and establishes the
following regression model (models 1 and 2) based on different variables to
verify hypothesis 2:
Model 1:
Model 2:
Second, the interaction terms of the ownership
structure component and CSR are studied separately to explore the impact on
financial performance (ROA and ROE). These models are established to verify
hypothesis 3 which explains the moderating effect of managerial ownership
between CSR and financial performance:
Model 3:
Model 4:
In
the above models, CSR is an independent variable of CSR; ROA and ROE are the
dependent variables of financial performance; CSR*MOWN is the interaction
variable between CSR and managerial ownership which is the projection of
ownership structure as the moderating variable; SIZE, LEV, COV, BOARDSIZE,
GROWTH, and LIQ are the control variables; α and β are the coefficients of each
variable; and e represents the random error.
Results and Discussion
Descriptive Result
The study employed
descriptive statistics to determine the characteristics of each variable.
Consequently, by doing descriptive statistical tests, we will be able to
determine the mean, standard deviation, minimum, and maximum values of each
variable. The descriptive statistical tests are categorized into two groups,
focusing on the specific countries: Indonesia and Singapore. The separation of
descriptive statistical tests between two countries is conducted to ascertain
the features of each variable in each country. A total of 220 observations were
recorded, with 110 observations from Indonesian companies and 110 observations
from Singaporean companies. Table 2 shows the results of descriptive
statistical analysis for each variable in each country.
First, the mean figure
of ROA indicates that Indonesian companies can earn profits equivalent to
approximately 8.5% of their total assets, whereas Singapore companies can make
profits of approximately 3.3% of their whole assets. The minimum and maximum values of Indonesian
companies are −0.035 and 0.462, respectively. The minimum and maximum values of
Singapore companies are -0.061 and 0.116.
Second, the mean
return on equity (ROE) indicates that Indonesian companies are capable of
generating profits of approximately 18.1% and Singaporean companies can
generate approximately 6.8% for each unit of capital invested in the company.
The minimum and maximum values of Indonesian companies are −0.187 and 1.454,
respectively. The minimum and maximum values of Singapore companies are -0.146
and 0.250.
Third, Indonesian
companies have an average CSR disclosure rate of 38%, while Singaporean
companies have a rate of 37.7%. These rates represent the proportion of total
activities that should be declared according to the Global Reporting Initiative
(GRI) criteria. The mean value of both nations remains below 50%, suggesting
that companies in both countries still have the opportunity to improve their
CSR disclosure.
Fourth, In Indonesian
companies, the average share ownership by managerial parties or insiders is
1.1%, while in Singaporean companies, the average share ownership by management
is 2.1% of the total outstanding shares In both countries, the minimum level of
managerial ownership is 0% as there are several companies where the management
does not own any shares in the company.
Table 2 Descriptive Statistics
|
|
Mean |
Std. Dev |
Min. |
Max |
||||
|
INA |
SGP |
INA |
SGP |
INA |
SGP |
INA |
SGP |
|
|
Dependent Variables |
||||||||
|
ROA |
0.085 |
0.033 |
0.101 |
0.029 |
-0.035 |
-0.061 |
0.462 |
0.116 |
|
ROE |
0.181 |
0.068 |
0.291 |
0.067 |
-0.187 |
-0.146 |
1.454 |
0.250 |
|
Independent Variable |
||||||||
|
CSR |
0.380 |
0.377 |
0.195 |
0.191 |
0.090 |
0.033 |
0.876 |
0.843 |
|
Moderating Variable |
||||||||
|
OWN |
0.011 |
0.021 |
0.031 |
0.050 |
0.000 |
0.000 |
0.124 |
0.261 |
|
Controlling Variables |
||||||||
|
SIZE |
21.73 |
23.26 |
0.977 |
1.194 |
19.26 |
21.16 |
23.97 |
26.91 |
|
LEV |
1.353 |
1.206 |
1.120 |
0.891 |
0.083 |
0.085 |
4.839 |
3.447 |
|
COVID |
0.400 |
0.400 |
0.492 |
0.492 |
0.000 |
0.000 |
1.000 |
1.000 |
|
BOARDSIZE |
1.941 |
2.279 |
0.337 |
0.295 |
1.098 |
1.386 |
2.639 |
2.996 |
|
GROWTH |
0.126 |
0.051 |
2.497 |
1.041 |
-16.12 |
-6.033 |
9.750 |
5.952 |
|
LIQUIDITY |
2.045 |
1.494 |
1.274 |
1.313 |
0.336 |
0.069 |
7.812 |
8.837 |
Normality Test
This study initially
conducted a data normality test to demonstrate the difference in CSR disclosure
levels between Indonesian and Singaporean companies. The normality test is
applied to determine the presence of normal distribution in the investigated
data. Once the normality of the data is established, the appropriate analysis
method may be selected to quantify the extent of disparity between the two
countries.
A data normality test
is considered to pass if the data follows a normal distribution, shown by a
probability value greater than 0.05. Moreover, the independent sample t-test
analysis is applicable only when certain conditions are encountered,
specifically when the data follows a normal distribution. On the other hand,
when the data being examined does not follow a normal distribution, the
Mann-Whitney test can be employed. The results of the normality test are shown
in the table below:
Table 3 Normality Test
|
Group |
Varia -ble |
Obs. |
W |
V |
z |
Prob >z |
|
INA |
CSR |
110 |
0.9542 |
4.090 |
3.141 |
0.0008 |
|
SGP |
CSR |
110 |
0.9757 |
2.172 |
1.729 |
0.0419 |
According
to the normality test results, it is evident that both countries have a
probability value of less than 0.05. These results suggest that the data
utilized does not follow a normal distribution. The Mann-Whitney comparison
test was utilized in this study to assess the level of CSR Disclosure
comparison.
Mann-Whitney
Test
A
comparative analysis of CSR disclosure levels was performed in this study using
the Mann-Whitney test. The t-test is employed to quantify the extent of
disparity between two distinct and unrelated samples, specifically Indonesia
and Singapore. A substantial difference between the two samples can be
established if the probability value or significance threshold is below 0.05.
On the
other hand, if the probability value is higher than 0.05, it cannot be
demonstrated that there is a substantial distinction between the two separate
samples, or it may be stated that there is no disparity between the two
countries. The outcomes of the Mann-Whitney test are displayed in the subsequent
table:
Table 4 Mann-Whitney Test
|
Country |
Obs. |
Rank sum |
Expected |
|
Indonesia |
110 |
12345 |
12155 |
|
Singapore |
110 |
11965 |
12155 |
|
Combined |
220 |
24310 |
24310 |
|
Unadjusted variance |
222841.67 |
||
|
Adjustment for
ties |
-39.68 |
||
|
Adjusted
variance |
222801.99 |
||
|
Z = 0.4030 |
|||
|
Prob > |z| = 0.6873 |
|||
|
Exact prob = 0.6883 |
|||
According
to the Mann-Whitney test results in Table 4, the probability value is 0.6873.
This implies that there is no significant difference in CSR disclosure between
Indonesia and Singapore.
Correlation
Analysis Result
Table 5 shows the
correlation between the independent variables and the control variable. The
table shows that each variable does not reflect multicollinearity, as their
correlation coefficients are all below |0.8| (Basuki & Prawoto, 2016).
Table 5 Correlation Analysis for All Variables
|
|
CSR |
OWN*CSR |
FIRM
SIZE |
LEV |
COVID |
B-SIZE |
GROWTH |
LIQ |
|
CSR |
1 |
0.1155 |
0.2576 |
0.0318 |
0.2994 |
-0.0372 |
-0.0926 |
0.1787 |
|
OWN*CSR |
0.2712 |
1 |
0.2054 |
0.0552 |
0.0553 |
0.0099 |
0.0685 |
0.0137 |
|
FIRM
SIZE |
0.1859 |
0.0572 |
1 |
0.2952 |
0.0428 |
0.3091 |
0.0564 |
-0.1016 |
|
LEV |
0.0374 |
-0.0651 |
0.3100 |
1 |
0.0209 |
0.3597 |
-0.0782 |
-0.2297 |
|
COVID |
0.4968 |
0.0639 |
0.0648 |
0.0859 |
1 |
0.0209 |
0.0131 |
0.0683 |
|
B-SIZE |
-0.0425 |
-0.2124 |
0.1321 |
0.0685 |
0.0379 |
1 |
-0.0637 |
-0.4961 |
|
GROWTH |
0.0501 |
0.0534 |
0.0628 |
-0.0228 |
0.1305 |
-0.0544 |
1 |
-0.0350 |
|
LIQ |
-0.0276 |
-0.1211 |
-0.3359 |
-0.5404 |
-0.0338 |
0.1969 |
-0.0077 |
1 |
Note: The
lower triangle is the correlation that the object is Indonesia, and the upper
triangle is the correlation that the object is Singapore.
Regression
Results
Table 6 Regression Results
|
|
Model
1 |
Model
2 |
Model
3 |
Model
4 |
||||
|
|
INA |
SGP |
INA |
SGP |
INA |
SGP |
INA |
SGP |
|
Constanta |
0.030** |
0.085* |
0.001*** |
0.172 |
0.078* |
0.149 |
0.008*** |
0.329 |
|
|
|
|
|
|
|
|
|
|
|
Independent Variable |
|
|
|
|
|
|
|
|
|
CSR |
0.482 |
0.003*** |
0.603 |
0.000*** |
0.578 |
0.002*** |
0.576 |
0.004*** |
|
|
|
|
|
|
|
|
|
|
|
Moderating Variable |
|
|
|
|
|
|
|
|
|
OWN*CSR |
|
|
|
|
0.157 |
0.061* |
0.320 |
0.011** |
|
|
|
|
|
|
|
|
|
|
|
Controlling
Variables |
||||||||
|
FIRM
SIZE |
0.039** |
0.041** |
0.001*** |
0.079* |
0.112 |
0.071* |
0.008*** |
0.186 |
|
LEV |
0.132 |
0.129 |
0.526 |
0.014** |
0.077* |
0.129 |
0.751 |
0.227 |
|
COVID |
0.004*** |
0.133 |
0.003*** |
0.005*** |
0.005*** |
0.122 |
0.004*** |
0.051* |
|
B-SIZE |
0.277 |
0.116 |
0.452 |
0.277 |
0.360 |
0.151 |
0.565 |
0.226 |
|
GROWTH |
0.114 |
0.552 |
0.180 |
0.368 |
0.112 |
0.576 |
0.178 |
0.470 |
|
LIQ |
0.156 |
0.291 |
0.996 |
0.813 |
0.116 |
0.311 |
0.943 |
0.846 |
|
|
|
|
|
|
|
|
|
|
|
R-square |
0.2747 |
0.2237 |
0.3065 |
0.2217 |
0.2848 |
0.2344 |
0.3051 |
0.2417 |
|
F Value |
6.51 |
2.37 |
4.49 |
3.30 |
6.80 |
3.06 |
5.19 |
2.30 |
To analyze
the effect of the independent variable on the dependent variable, we can do
hypothesis testing using panel data regression analysis. Hypothesis testing involves
examining the probability value of each variable measured at significance
levels of 0.1, 0.05, and 0.01. Table 6 shows the results of the regression
analysis based on each model in each country.
Model 1
illustrates the effect of Corporate Social Responsibility (CSR) on Return on
Assets (ROA). The results reveal that the probability value in Indonesian
companies is 0.482, which exceeds the significance value. This finding
indicates that there is no impact of CSR on ROA in Indonesian companies. In Singapore,
companies have a probability value of 0.003. This number demonstrates
statistical significance at the confidence levels of 0.1, 0.05, and 0.01. These
findings indicate that CSR has a significant impact on ROA in Singaporean
companies.
Model 2 demonstrates
the impact of Corporate Social Responsibility (CSR) on Return on Equity (ROE).
The findings indicate that the probability value in Indonesian enterprises is
0.603, above the significance value. This finding shows that CSR does not have
any impact on the return on equity ROE in Indonesian companies. In Singapore,
companies have a probability value of 0.000, indicating that the value has
statistical significance at the confidence levels of 0.1, 0.05, and 0.01. The
results indicated that CSR has a significant impact on ROE in companies based
in Singapore.
Model 3
illustrates the impact of managerial ownership on strengthening the
relationship between CSR disclosure and ROA. The result shows that the
probability value in Indonesian companies is 0.578, which is more than the
significance value. The result indicates that managerial ownership as a
moderating variable cannot affect the relationship between CSR and ROA.
Meanwhile, Singapore companies have a probability value of 0.002. This number
demonstrates statistical significance at the confidence levels of 0.1, 0.05,
and 0.01. These findings indicate that managerial ownership strengthens the
relationship between CSR disclosure and ROA in Singapore companies.
Model 4
demonstrates the effect of managerial ownership in strengthening the
correlation between CSR disclosure and ROE. The outcome indicates that the
probability value in Indonesian enterprises is 0.576, above the significance
value. The findings suggest that management ownership, when used as a moderating
variable, does not have an impact on the link between CSR and ROE in Indonesian
companies. Meanwhile, Singapore companies have a probability coefficient of
0.004. This value has statistical significance at the confidence levels of 0.1,
0.05, and 0.01. The results suggest that when managers have ownership stakes,
the connection between CSR disclosure and ROE is enhanced in companies based in
Singapore.
Discussion
The
Mann-Whitney Test reveals that there is no statistically significant disparity
in corporate social responsibility (CSR) disclosure between corporations in
Indonesia and Singapore. Therefore, hypothesis 1 is rejected. The results of
this study contradict the research conducted by Aldama et al. (2021), which demonstrated a notable
disparity in CSR disclosure between corporations in Indonesia and Singapore.
The study undertaken by Aldama et al. (2021) focused on the banking sector.
This study
shows a diverse range of industries in its sample, excluding the banking
industry, which is not part of the research sample. Furthermore, the sample
included in this study comprises firms that possess the utmost amount of market
capitalization in their respective countries. In Indonesian companies, the
findings indicate that corporate social responsibility (CSR) does not have any
impact on financial performance. Therefore, hypothesis 2a is rejected. This
finding aligns with the study conducted by (Siregar
& Bukit, 2018).
The study
found no correlation between CSR and financial performance as measured by ROA
and ROE. The result that shows that there is no significant effect of CSR
initiatives on financial performance may be attributed to the market's
perceptions of CSR. If the market does not attach importance to CSR, then CSR
initiatives will not have a significant impact on financial performance. The
result of the test in Indonesian companies is different from Singapore
companies.
The result
of the test shows that there is a significant impact of CSR on financial
performance (ROA and ROE). Therefore, hypothesis 2b is accepted. This is
because corporate social responsibility (CSR) initiatives have evolved into an
integral business function within the organisation. This study aligns with the
results explained by Ding (2017), who stated that transitioning a
company's operations to a sustainable model includes substantial improvements
in the cost structure while also offering possible benefits.
The existence of
ownership structure in Indonesian companies does not appear to enhance the
effect of corporate social responsibility (CSR) on return on assets (ROA) and
return on equity (ROE). Therefore, hypothesis 3a is rejected. The results of
this study differ from the tests conducted on companies in Singapore. The test
results show that the existence of an ownership structure can strengthen the
impact of corporate social responsibility (CSR) on return on assets (ROA) and
return on equity (ROE). Therefore, hypothesis 3b is accepted.
The research conducted
on several companies in Singapore aligns with the findings of Ang et al.
(2022), Javeed & Lefen (2019), (Yeon,
Lin, Lee, & Sharma, 2021). All three studies demonstrate a
significant positive association between the interaction between managerial
ownership and corporate social responsibility (CSR) and firm performance.
Moreover, it is important to highlight that all three of the previously
mentioned research were carried out in developed countries. It is noteworthy
that Singapore, classified as a developed country, is in line with the scope of
this research.
Conclusion
Within the analysis of Indonesian companies,
it was found that there is no significant impact of CSR disclosure on financial
performance and the influence of managerial ownership. When analyzing
Singaporean companies, it is shown that CSR disclosure has a significant impact
on financial performance. Additionally, managerial ownership plays a crucial
role in strengthening the connection between CSR and financial performance.
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Copyright holder: Vania Aqila Lituhayu,
Arief Wibisono Lubis (2023) |
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First publication right: Syntax Literate: Jurnal Ilmiah Indonesia |
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