IDEAS home Printed from https://ideas.repec.org/a/mth/ber888/v6y2016i2p51-64.html
   My bibliography  Save this article

Corporate Social Responsibility (CSR) Performance and Accrual Quality: Case study on Firms Listed on Indonesia Stock Exchange (IDX)

Author

Listed:
  • Ferry Aditya

Abstract

Research on the impact of corporate social responsibility (CSR) performance to the financial performance have been widely studied previously. However, there were a few studies investigate the effect of CSR on accrual quality which is one of the attributes of earning quality. The aim of this study is to examine the affect of CSR toward accrual quality in the context of Indonesia, where the empirical results of the benefits of CSR implementation are still scant. Research samples are all listed companies in Indonesia Stock Exchange (IDX) in miscellaneous industry sector for period 2009 to 2013. There are 92 firm years included in this study. CSR is measured by scoring CSR activities of the firm based on GRI Index guideline version 3.1, whereas attributes of earning quality used in this study is accrual quality. We include two control variables in this research model i.e. firm size and leverage. The results show that CSR performance do not explain the changes in accrual quality. Leverage has no effect on accrual quality as well. On the other hand firm size has a significant effect on CSR performance however the sign of association is contrary with the expected.

Suggested Citation

  • Ferry Aditya, 2016. "Corporate Social Responsibility (CSR) Performance and Accrual Quality: Case study on Firms Listed on Indonesia Stock Exchange (IDX)," Business and Economic Research, Macrothink Institute, vol. 6(2), pages 51-64, December.
    • Handle: RePEc:mth:ber888:v:6:y:2016:i:2:p:51-64
    as

    Download full text from publisher

    File URL: http://www.macrothink.org/journal/index.php/ber/article/view/9752/7913
    Download Restriction: no
    File URL: http://www.macrothink.org/journal/index.php/ber/article/view/9752
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Julie Pirsch & Shruti Gupta & Stacy Grau, 2007. "A Framework for Understanding Corporate Social Responsibility Programs as a Continuum: An Exploratory Study," Journal of Business Ethics, Springer, vol. 70(2), pages 125-140, January.
    2. Unknown, 2014. "Media Coverage 2014," 2014: Ethics, Efficiency and Food Security: Feeding the 9 Billion, Well, 26-28 August 2014 225573, Crawford Fund.
    3. Diego Prior & Jordi Surroca & Josep A. Tribó, 2008. "Are Socially Responsible Managers Really Ethical? Exploring the Relationship Between Earnings Management and Corporate Social Responsibility," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(3), pages 160-177, May.
    4. Nagib Salem Bayoud & Marie Kavanagh & Geoff Slaughter, 2012. "An Empirical Study Of The Relationship Between Corporate Social Responsibility Disclosure And Organizational Performance: Evidence From Libya," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 5(3), pages 69-82.
    5. Vicente Lima Crisóstomo & Fátima de Souza Freire & Felipe Cortes de Vasconcellos, 2011. "Corporate social responsibility, firm value and financial performance in Brazil," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 7(2), pages 295-309, June.
    6. Denise Luethge & Helen Guohong Han, 2012. "Assessing corporate social and financial performance in China," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 8(3), pages 389-403, July.
    7. Francis, Jennifer & LaFond, Ryan & Olsson, Per & Schipper, Katherine, 2005. "The market pricing of accruals quality," Journal of Accounting and Economics, Elsevier, vol. 39(2), pages 295-327, June.
    8. Vicente Lima Crisóstomo & Fátima de Souza Freire & Felipe Cortes de Vasconcellos, 2011. "Corporate social responsibility, firm value and financial performance in Brazil," Social Responsibility Journal, Emerald Group Publishing, vol. 7(2), pages 295-309, July.
    9. Ivo Welch, 2011. "Two Common Problems in Capital Structure Research: The Financial‐Debt‐To‐Asset Ratio and Issuing Activity Versus Leverage Changes," International Review of Finance, International Review of Finance Ltd., vol. 11(1), pages 1-17, March.
    10. Jaepil Choi & Heli Wang, 2009. "Stakeholder relations and the persistence of corporate financial performance," Strategic Management Journal, Wiley Blackwell, vol. 30(8), pages 895-907, August.
    11. Abagail McWilliams & Donald Siegel, 2000. "Corporate social responsibility and financial performance: correlation or misspecification?," Strategic Management Journal, Wiley Blackwell, vol. 21(5), pages 603-609, May.
    12. Francis, Jennifer & LaFond, Ryan & Olsson, Per & Schipper, Katherine, 2004. "The Market Pricing of Accruals Quality," SIFR Research Report Series 22, Institute for Financial Research.
    13. Mohammad Badrul Muttakin & Arifur Khan & Mohammad I Azim, 2015. "Corporate social responsibility disclosures and earnings quality: Are they a reflection of managers’ opportunistic behavior?," Managerial Auditing Journal, Emerald Group Publishing, vol. 30(3), pages 277-298, March.
    14. Hashem Valipour & Mehdi Moradbeygi, 2011. "Corporate Debt Financing and Earnings Quality," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 1(3), pages 1-10.
    15. Chen, Lujie & Feldmann, Andreas & Tang, Ou, 2015. "The relationship between disclosures of corporate social performance and financial performance: Evidences from GRI reports in manufacturing industry," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 445-456.
    16. Paul Dunn & Barbara Sainty, 2009. "The relationship among board of director characteristics, corporate social performance and corporate financial performance," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 5(4), pages 407-423, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emmanuel Lawal & Gökan May & Bojan Stahl, 2017. "The Significance of Corporate Social Disclosure for High‐Tech Manufacturing Companies: Focus on Employee and Community Aspects of Sustainable Development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(4), pages 295-311, July.
    2. María del Mar Miras‐Rodríguez & Amalia Carrasco‐Gallego & Bernabé Escobar‐Pérez, 2015. "Are Socially Responsible Behaviors Paid Off Equally? A Cross‐cultural Analysis," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 22(4), pages 237-256, July.
    3. Zhonghua Zhao & Fanchen Meng & Yin He & Zhouyang Gu, 2019. "The Influence of Corporate Social Responsibility on Competitive Advantage with Multiple Mediations from Social Capital and Dynamic Capabilities," Sustainability, MDPI, vol. 11(1), pages 1-16, January.
    4. Aneta Oniszczuk-Jastrząbek & Ernest Czermański & Giuseppe T. Cirella, 2020. "Sustainable Supply Chain of Enterprises: Value Analysis," Sustainability, MDPI, vol. 12(1), pages 1-15, January.
    5. Dolores Gallardo-Vázquez & María J. Barroso-Méndez & María L. Pajuelo-Moreno & Julio Sánchez-Meca, 2019. "Corporate Social Responsibility Disclosure and Performance: A Meta-Analytic Approach," Sustainability, MDPI, vol. 11(4), pages 1-33, February.
    6. Maria J. Charlo & Ismael Moya & Ana M. Muñoz, 2017. "Financial Performance of Socially Responsible Firms: The Short- and Long-Term Impact," Sustainability, MDPI, vol. 9(9), pages 1-15, September.
    7. Mukherjee, Abhishek & Bird, Ron & Duppati, Geeta, 2018. "Mandatory Corporate Social Responsibility: The Indian experience," Journal of Contemporary Accounting and Economics, Elsevier, vol. 14(3), pages 254-265.
    8. Yuanyuan Hu & Shouming Chen & Yuexin Shao & Su Gao, 2018. "CSR and Firm Value: Evidence from China," Sustainability, MDPI, vol. 10(12), pages 1-18, December.
    9. John Ben Prince, 2021. "Ownership Characteristics,Corporate Social Responsibility, Resource Productivity And Firm Performance: An Empirical Study," Indian Journal of Corporate Governance, , vol. 14(1), pages 71-85, June.
    10. Tahira Naseem & Faisal Shahzad & Ghazanfar Ali Asim & Ijaz Ur Rehman & Faisal Nawaz, 2020. "Corporate social responsibility engagement and firm performance in Asia Pacific: The role of enterprise risk management," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 501-513, March.
    11. Jaime Guerrero‐Villegas & Laura Sierra‐García & Beatriz Palacios‐Florencio, 2018. "The role of sustainable development and innovation on firm performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 25(6), pages 1350-1362, November.
    12. Abraham Ansong, 2017. "Corporate social responsibility and firm performance of Ghanaian SMEs: The role of stakeholder engagement," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1333704-133, January.
    13. Ramakrishnan Ramanathan, 2018. "Understanding Complexity: the Curvilinear Relationship Between Environmental Performance and Firm Performance," Journal of Business Ethics, Springer, vol. 149(2), pages 383-393, May.
    14. Xueyan Dong & Jingyu Gao & Sunny Li Sun & Kangtao Ye, 2021. "Doing extreme by doing good," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 291-315, March.
    15. Franck Brulhart & Sandrine Gherra & Bertrand V. Quelin, 2019. "Do Stakeholder Orientation and Environmental Proactivity Impact Firm Profitability?," Journal of Business Ethics, Springer, vol. 158(1), pages 25-46, August.
    16. Lee, Gilsoo & Cho, Sam Yul & Arthurs, Jonathan & Lee, Eun Kyung, 2020. "Celebrity CEO, identity threat, and impression management: Impact of celebrity status on corporate social responsibility," Journal of Business Research, Elsevier, vol. 111(C), pages 69-84.
    17. Han Li, 2014. "Top Executives¡¯ Ability and Earnings Quality: Evidence from the Chinese Capital Markets," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 5(2), pages 79-86, April.
    18. Nair, Rajiv & Muttakin, Mohammad & Khan, Arifur & Subramaniam, Nava & Somanath, V.S., 2019. "Corporate social responsibility disclosure and financial transparency: Evidence from India," Pacific-Basin Finance Journal, Elsevier, vol. 56(C), pages 330-351.
    19. Tai-Hsi Wu & Hsiang-Lin Chih & Mei-Chen Lin & Yi Hua Wu, 2020. "A Data Envelopment Analysis-Based Methodology Adopting Assurance Region Approach for Measuring Corporate Social Performance," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 148(3), pages 863-892, April.
    20. Hajer Tebini & Bouchra M’Zali & Pascal Lang & Paz Méndez-Rodrı́guez, 2015. "Social Performance and Financial Performance: A Controversial Relationship," International Series in Operations Research & Management Science, in: Enrique Ballestero & Blanca Pérez-Gladish & Ana Garcia-Bernabeu (ed.), Socially Responsible Investment, edition 127, chapter 0, pages 53-73, Springer.

    More about this item

    Keywords

    Corporate social responsibility; Earning quality; Accrual quality;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mth:ber888:v:6:y:2016:i:2:p:51-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Technical Support Office (email available below). General contact details of provider: http://www.macrothink.org/journal/index.php/ber .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.