Corporate social responsibility policies and value creation: does corporate governance and profitability mediate that relationship?
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Author(s)Josua TariganLink to ORCID Index: http://orcid.org/0000-0003-2729-7433
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Saarce Elsye HataneLink to ORCID Index: https://orcid.org/0000-0002-3797-1623
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Linneke Stacia
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Deborah Christine WidjajaLink to ORCID Index: https://orcid.org/0000-0001-5867-7530
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DOIhttp://dx.doi.org/10.21511/imfi.16(2).2019.23
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Article InfoVolume 16 2019, Issue #2, pp. 270-280
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- 1357 Views
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227 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
With a purpose to give a deep understanding relating to the manifestation of social responsibilities practices among Indonesian companies, this paper reflects the relationship of corporate social responsibility (CSR), corporate profitability (CP), value creation (VC) and good corporate governance (GCG). Kinder, Lydenberg, and Domini’s (KLD) measurement approach is used in this study to measure the social responsibility practices, as this gives cross-border analysis of social responsibility. Corporate profitability captures return on assets, which is accounting-based measurement, whereas value creation explains the economic value added, which is shareholder-based measurement. Structural Equation Model (SEM) analysis is conducted for Indonesian listed companies, which appeared in Corporate Governance Perception Index (CGPI). The empirical result suggests that CSR serves as a tool in assisting shareholders value and performance. Accordingly, firms should incorporate CSR practices to enhance its strategic investment and sustain a strong relationship with its stakeholders. Subsequently, management should also take concern of having good corporate governance in order to improve company’s performance by supervising and monitoring of the company’s operation, ensure the fulfillment to the stakeholder’s interest. This paper presents fresh insights into applications of corporate social responsibility principles and corporate governance in Indonesian context that has not received systematic attention and consideration in the literature.
- Keywords
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JEL Classification (Paper profile tab)M4, Q5, G3
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References35
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Tables9
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Figures1
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- Figure 1. Structural model result
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- Table 1. Summary of the sample observed
- Table 2. Variable definitions and data source
- Table 3. Combined loadings and cross-loadings
- Table 4. AVE table
- Table 5. Collinearity table
- Table 6. Descriptive statistics
- Table 7. Path coefficient and p-values
- Table 8. Indirect effect and p-values
- Table 9. Total effect and p-values
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The effect of working capital management on profitability: a case of listed manufacturing firms in South Africa
Investment Management and Financial Innovations Volume 14, 2017 Issue #2 (cont. 2) pp. 336-346 Views: 3178 Downloads: 2647 TO CITE АНОТАЦІЯWorking capital management plays a pivotal role in enhancing the operational efficiency of firms and their ultimate profitability. Therefore, the purpose of this study was to examine the trends in working capital management and its impact on the financial performance of listed manufacturing firms on the Johannesburg Securities Exchange (JSE). A panel data methodology was used with different regression estimators to analyze this relationship based on an unbalanced panel of 69 manufacturing firms listed during the period 2007–2016.
The findings revealed that the average collection period and the average payment period are negative and statistically significant for profitability, implying that firms which efficiently manage their accounts receivable and those that pay their creditors on time perform better than those that do not. Additionally, a positive statistically significant relationship between the number of days in inventory and profitability was supported suggesting that firms which stock-up and maintain their inventory levels suffer less from stock-outs and avoid challenges of securing financing when needed. This increases their operational efficiency and ensures profitability in the long run. It could not be ascertained whether a shorter or longer cash conversion cycle enhances firm profitability, since findings to support this premise were weak. However, it was observed that manufacturing firms are on average, carrying lot of debt in their capital structures.
The present study contributes to existing literature by presenting one of the very recent findings on this topic while simultaneously testing the validity of recent local and international methodologies, in order to inform policy change. -
Integrated reporting and financial performance of South African listed banks
Reon Matemane ,
Rozane Wentzel
doi: http://dx.doi.org/10.21511/bbs.14(2).2019.11
Banks and Bank Systems Volume 14, 2019 Issue #2 pp. 128-139 Views: 2743 Downloads: 536 TO CITE АНОТАЦІЯThe recent development of integrated reporting intends to address the limitations associated with corporate reporting practices. This paper aims to examine whether a statistically significant relationship exists between integrated reporting quality and financial performance. Secondary data was used, namely the integrated reports and annual financial statements of South African banks listed on the Johannesburg Stock Exchange (JSE) for 2010–2014. For the period 2005–2009, only the financial statements were used, since integrated reporting was not yet mandatory. The research design was longitudinal and it combined qualitative and quantitative methods. Descriptive statistics and Feasible Generalized Least Square (FGLS) were used to explore the relationships between financial performance and integrated reporting quality. The results indicate that there is a positive relationship between integrated reporting quality (IRQ) and earnings per share (EPS). However, there is no significant relationship between IRQ and Tobin’s q (Q-Ratio), IRQ and return on equity (ROE), IRQ and return on assets (ROA) as well as IRQ and economic value added (EVA). Moreover, there are no significant differences on the financial performance of the listed banks before and after the introduction of integrated reporting.
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Performance of deposit money banks and liquidity management in Nigeria
Adegbola Olubukola Otekunrin ,
Gabriel Damilola Fagboro ,
Tony Ikechukwu Nwanji ,
Festus Femi Asamu ,
Babatunde Oluseyi Ajiboye ,
Adebanjo Jospeh Falaye
doi: http://dx.doi.org/10.21511/bbs.14(3).2019.13
Banks and Bank Systems Volume 14, 2019 Issue #3 pp. 152-161 Views: 2564 Downloads: 669 TO CITE АНОТАЦІЯThis study examined the performance of selected quoted deposit banks of Nigeria and liquidity management. Secondary data used was extracted from the financial statements of 15 money deposit banks out of population of 17 deposit money banks on the Nigerian Stock Exchange (NSE) for 2012–2017 (six years). The descriptive research design was used. The data collected was analyzed using ordinary least square method (OLS). Liquidity management was measured using capital ratio (CTR), current ratio (CR) and cash ratio (CSR), while performance was measured using return on assets (ROA). Based on the results of the study, liquidity management proxied by capital ratio, current ratio and cash ratio and performance of the firm proxied by return on assets are positively related. The result shows that liquidity management is an essential factor in business operations and consequently leads to business profitability. Hence proper liquidity management helps solve the agency theory problem of agency costs that arise when control of companies is separated from the ownership, whereby managers are able to employ the firm’s resources for personal gains instead of maximizing the value of the firm or the shareholders’ wealth. The value of the firm and the shareholders’ wealth can be maximized through the firm’s profitability via effective and efficient liquidity management.
