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Moderating Effect of Earnings Management on the Relationship Between Corporate Social Responsibility Disclosure and Profitability of Banks in Indonesia

Author

Listed:
  • Jaja Suteja

    (Faculty of Economics, Universitas Pasundan, Jalan Tamansari 6-8 Bandung, 40116, Indonesia,)

  • Ardi Gunardi

    (Faculty of Economics, Universitas Pasundan, Jalan Tamansari 6-8 Bandung, 40116, Indonesia)

  • Annisa Mirawati

    (Faculty of Economics, Universitas Pasundan, Jalan Tamansari 6-8 Bandung, 40116, Indonesia.)

Abstract

This study aims to obtain empirical evidence of earnings management (EM) as a moderating variable between corporate social responsibility (CSR) and profitability. This research was conducted by taking a sample of banking companies listed in the Indonesia Stock Exchange in 2010-2014. Data were collected using purposive sampling. The statistical method used was moderated regression analysis. Findings proved that CSR disclosure positively and significantly influences a company's profitability. By contrast, eaarnings management had a negative and significant influence as the moderating variable on the relationship between CSR and a company's profitability. These results suggested that a high level of EM, which leads to an enhanced CSR program, corresponds to weak profitability of the banking companies

Suggested Citation

  • Jaja Suteja & Ardi Gunardi & Annisa Mirawati, 2016. "Moderating Effect of Earnings Management on the Relationship Between Corporate Social Responsibility Disclosure and Profitability of Banks in Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1360-1365.
    • Handle: RePEc:eco:journ1:2016-04-09
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    References listed on IDEAS

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    Cited by:

    1. Yang Deng & Tze San Ong & Rosmila Senik, 2024. "Trick or treat? A bibliometric literature review of corporate social responsibility and earnings management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4361-4383, September.
    2. Eugene Burgos Mutuc & Jen-Sin Lee & Fu-Sheng Tsai, 2019. "Doing Good with Creative Accounting? Linking Corporate Social Responsibility to Earnings Management in Market Economy, Country and Business Sector Contexts," Sustainability, MDPI, vol. 11(17), pages 1-20, August.
    3. Zixin Zhang & Teck Lee Yap & Jiyoung Park, 2021. "Does voluntary CSR disclosure and CSR performance influence earnings management? Empirical evidence from China," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(2), pages 161-178, June.

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    More about this item

    Keywords

    Corporate Social Responsibility; Earnings Management; Profitability; Banking Sector; Indonesia;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

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