Role of Family Ownership in the Relationship between Corporate Social Responsibility and Firm Performance

Abstract

This study examines the effect of corporate social responsibility (CSR) on firm performance in Indonesia. Most Indonesian companies are family-owned; therefore, it is important to consider the family ownership’s role in the relationship between CSR and firm performance. The study sample consists of 285 Indonesian listed firms for the period 2015–2019. Our results show that CSR positively affects performance. Companies that conduct more CSR activities perform better, indicating their importance. Further, the interaction between family ownership and CSR negatively affects firm performance. Therefore, family ownership weakens the positive effects of CSR. Family owners have significant disincentives for the CSR’s positive effect in improving firm performance.

Women on boards and ESG performance: empirical evidence before and during the COVID-19 pandemic in Indonesia and Malaysia

“…British American Tobacco (Malaysia) has the highest percentage of women board members at 62.5%, while several companies in Indonesia and Malaysia do not have women board members. The percentage of family-owned companies in Indonesia is 51.42%, while in Malaysia, it is 48.83%; these findings align with the results reported by Setiawan et al (2022), Tan (2017), indicating that family firms dominate the ownership structure of companies in both countries.…”

“…British American Tobacco (Malaysia) has the highest percentage of women board members at 62.5%, while several companies in Indonesia and Malaysia do not have women board members. The percentage of family-owned companies in Indonesia is 51.42%, while in Malaysia, it is 48.83%; these findings align with the results reported bySetiawan et al (2022),Tan (2017), indicating that family firms dominate the ownership structure of companies in both countries.The study employed seven control variables: firm size, leverage, ROA, board size, independent board, country effect, and industry. As shown in Table5, company size, leverage, board size, and independent board have a narrow data distribution, indicated by their standard deviation values being smaller than their average values.…”

“…Family firms are those in which the founder or family members, either by blood or marriage, hold positions as directors or stockholders, individually or collectively (Anderson and Reeb, 2003). This study is interested in analyzing the influence of family firms because companies in Indonesia and Malaysia are controlled by families (Setiawan et al , 2022; Tan, 2017). Two perspectives indicate that family firms can influence ESG activities: the “long-term horizon” perspective and the “expropriation” perspective (Sahasranamam et al , 2020).…”

The Investigation about the Heritage over Generations for the Family Enterprise and Firms Financialization Process

“…In terms of literature, the survey shows that family businesses will become targets [6]. Therefore, this paper selects 488 family businesses facing intergenerational transmission from 2008 to 2018 as the research object, as well as the influencing factors between intergenerational enterprises [7].…”

The Effect of Capital Structure, Dividend Policy, and Foreign Ownership on Firm Value

“…An increase in firm value will increase the likelihood of higher dividend payments. It is expected that the alignment effect of ownership control will have a positive impact on dividend payments (Setiawan et al, 2022). Companies need to maintain their dividend policy on an ongoing basis so that investors can interpret the situation as a signal of the company's performance (Chosiah et al, 2019).…”