Corporate Social Responsibility as Economic Mechanism for Creating Firm Value

Ronald, Sam; Ng, Suwandi; Daromes, Fransiskus Eduardus

doi:10.28992/ijsam.v3i1.69

Cited by 27 publications

(25 citation statements)

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“…Previous studies indicate the positive roles of socially responsible business conducts on firm’s values (Luo and Bhattacharya, 2006; Mishra and Suar, 2010; Wibowo, 2012) and in helping firm to minimize risks and damaging litigation costs (McGuire et al , 1988). Similar implication was also recognized in the Indonesian setting as past study identified positive influence of corporate social responsibility (CSR) for large firms (Ronald et al , 2019). The present study posits that CSR, as part of the stakeholder’s roles’ provision set by the OECD and the Indonesian GCG codes, is critical for firms.…”

Section: Literature Review and Development Of Hypothesessupporting

confidence: 60%

A cross-firm analysis of corporate governance compliance and performance in Indonesia

Tanjung

2020

MAJ

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Purpose The study aims to construct a cross-firm corporate governance index to predict firm performance. The index consists of 15 governance elements from a large sample of the Indonesian firms covering the period from 2003 to 2013. Design/methodology/approach This study presents robust results as the findings are tested by applying the generalized method of moments (GMM) estimator to eliminate endogeneity problems and unobservable heterogeneity posed by the relationship between performance and firm-level governance practices. Findings The results indicate that the corporate governance index is associated with enhanced corporate financial performance. Likewise, the findings reported under the pooled ordinary least squares and GMM also indicate corporate governance sub-indexes (elements), which have significant effects on performance: whistleblower mechanism, audit quality, board of director size and blockholders. Research limitations/implications In the emerging market context, this study supports the notion that active and self-regulated governance practices are appreciated by the market and, in the end, can have a positive impact on financial performance. The analysis adds to the empirical literature by providing insights into how governance provisions are being actively implemented in the micro level. With regard to weak governance practices, this study is consistent with previous studies, according to which, firms have the opportunity to use corporate governance as a way of differentiating themselves from other players in countries with poorly regulated investor protection and institutional settings. Originality/value This study makes a positive contribution, as it looks at the impact of Indonesia’s corporate governance compliance on the basis of a set of 15 unique governance provisions, including the findings of the positive influence of corporate governance in family business.

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Section: Literature Review and Development Of Hypothesessupporting

confidence: 60%

A cross-firm analysis of corporate governance compliance and performance in Indonesia

Tanjung

2020

MAJ

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“…CEO acts as a nexus between the stakeholders and encourages greater CSR engagement rather than being too much concerned about its own benefit (Cai et al, 2011). ESG firms carrying out CSR activities is proved to reduce cash-flow risk and is also being used as an intangible asset for a long-term purpose to benefit the interest of all the stakeholders (Chan et al, 2014;Gao & Zhang, 2013;Miles & Miles, 2013;Mukhtaruddin et al, 2019;Ronald et al, 2019). While CSR represents efforts made by the company to create a positive impact to the internal as well as external stakeholders; ESG disclosure is a systematic assessment of such activities carried out by the organization.…”

Section: Introductionmentioning

confidence: 99%

CEO Compensation and Firm Performance: The Role of ESG Transparency

Rath

Kurniasari

Deo

2020

IJSAM

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Chief executive officers (CEOs) of environmental, social, and governance (ESG) firms are known to take lesser pay and engage themselves in corporate social responsibility activities to achieve the dual objective of the enhancement of firm’s performance as well as benefit for stakeholders in the long run. This study examines the role of ESG transparency in strengthening the impact of firm performance on total CEO pay in ESG firms. A panel of 67 firms for the period of 2014–2019 has been analyzed using the two-step system GMM model, with NSE Nifty 100 ESG Index as the data sample and ESG scores from Bloomberg database as a proxy for transparency. Findings reveal that environmental and governance disclosure scores have the potential to intensify the negative relationship between firm performance and CEO compensation, while social disclosure scores do not. In addition, various firm-specific, board-specific, and CEO-specific attributes have also been considered controls affecting remuneration. This paper contributes to the literature by exploring the effect of exhibiting ESG transparency and its nexus with CEO pay as well as firm performance.

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“…All the properties include elements of social capital in shaping the core value of each hotel. Ronald & Daromes [13] found that CSR has a significant influence on increasing firm value and reducing risks. This finding is in accordance with Chen and Chang [14].…”

Section: Resultsmentioning

confidence: 99%

Green Hotel as a Competitive Product: A Case Study at 5-Star Hotel in Bali

Astawa¹,

Budarma²,

Widhari³

et al. 2020

TSSJ

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Today, tourists tend to choose hotels that consistently implement environmentally friendly practices. In accordance with this phenomenon, the concept of sustainable accommodation needs to apply the principles of environmental conservation, ecology, community empowerment, and the use of local products. Therefore, this study aimed to analyze Green Hotel as a Competitive Product. The problem of this study is “What green aspects do the hotel have that differentiate them from other competitors”? The population was 57 of five stars hotel in Bali that received THK Tourism Award. Meanwhile, 10 percent of the sample was determined by purposive sampling, and the data analysis method used was qualitative descriptive technique. The results showed that the product was developed from an ordinary characteristic to a greener specification. In response to green business practices, 100 per cent stated that adopting the practices can maintain the image of the hotel brand, serve as a competitive advantage, and make the company and employee performance more effective and efficient. Furthermore, the results showed that implementing environmentally friendly business practices are achieved by adopting local wisdom values.

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Corporate Social Responsibility as Economic Mechanism for Creating Firm Value

Cited by 27 publications

References 0 publications

A cross-firm analysis of corporate governance compliance and performance in Indonesia

A cross-firm analysis of corporate governance compliance and performance in Indonesia

CEO Compensation and Firm Performance: The Role of ESG Transparency

Green Hotel as a Competitive Product: A Case Study at 5-Star Hotel in Bali

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