Corporate Social Responsibility, Corporate Characteristics, and Financial Performance: Evidence from Indonesian Banks

Authors

  • Bernadeta Valentina Universitas Trisakti
  • Puteri Zaharah Universitas Trisakti
  • Maria Ariesta Utha Universitas Trisakti

DOI:

https://doi.org/10.30741/adv.v9i1.1483

Keywords:

Board Size, Corporate Social Responsibility, Financial Performance, Firm Age, Gender Diversity

Abstract

This study examines the relationship between financial success in the Indonesian banking sector, corporate social responsibility (CSR), and corporate characteristics (gender diversity, board size, and firm age). While extensive research has explored the direct impact of CSR on financial performance, fewer studies have examined the effects of corporate characteristics with financial performance, especially in Indonesia. Financial and corporate characteristic data were taken from 13 Indonesian bank’s annual and sustainability reports from 2019 to 2023. Using multiple regression analysis, this study discovered a positive correlation between gender diversity with ROE and firm age with ROA. In contrast, board size and CSR funds have no positive effect on both ROA and ROE.

Downloads

Download data is not yet available.

References

Abbas, A., & Frihatni, A. A. (2023). Gender diversity and firm performances suffering from financial distress: evidence from Indonesia. Journal of Capital Markets Studies, 7(1), 91–107. https://doi.org/10.1108/JCMS-12-2022-0045

Afif, M. A. (2018). Analisis Manfaat Program Corporate Social Responsibility (CSR) PT Djarum.

Aguinis, H., & Glavas, A. (2012). What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda. Journal of Management, 38(4), 932–968. https://doi.org/10.1177/0149206311436079

Andoh, J. A. N., Abugri, B. A., & Anarfo, E. B. (2023). Board Characteristics and performance of listed firms in Ghana. Corporate Governance (Bingley), 23(1), 43–71. https://doi.org/10.1108/CG-08-2020-0344

Asare, N., Muah, P., Frimpong, G., & Anyass, I. A. (2023). Corporate board structures, financial performance and stability: evidence from banking markets in Africa. Journal of Money and Business, 3(1), 43–59. https://doi.org/10.1108/jmb-12-2021-0071

Badruzaman, J. (2019). Effect Of Capital Structure On Return On Equity: A Survey On Issuers Of Categories JII70 Of The Indonesia Stock Exchange. Russian Journal of Agricultural and Socio-Economic Sciences, 89(5), 242–246. https://doi.org/10.18551/rjoas.2019-05.30

Christian Samosir, F. (2018). Effect of Cash Conversion Cycle, Firm Size, and Firm Age to Profitability. In Journal of Applied Accounting and Taxation Article History (Vol. 3, Issue 1).

Coad, A., Holm, J. R., Krafft, J., & Quatraro, F. (2018). Firm age and performance. Journal of Evolutionary Economics, 28(1), 1–11. https://doi.org/10.1007/s00191-017-0532-6

Coelho, R., Jayantilal, S., & Ferreira, J. J. (2023). The impact of social responsibility on corporate financial performance: A systematic literature review. In Corporate Social Responsibility and Environmental Management (Vol. 30, Issue 4, pp. 1535–1560). John Wiley and Sons Ltd. https://doi.org/10.1002/csr.2446

Đặng, R., Houanti, L. H., Reddy, K., & Simioni, M. (2020). Does board gender diversity influence firm profitability? A control function approach. Economic Modelling, 90, 168–181. https://doi.org/10.1016/j.econmod.2020.05.009

De Tommaso, S. F. N., & Pinsky, V. (2022). Creating shared value: the case of innovability at Suzano in Brazil. Innovation and Management Review, 19(3), 208–221. https://doi.org/10.1108/INMR-07-2021-0120

Elmassri, M., Kuzey, C., Uyar, A., & Karaman, A. S. (2023). Corporate social responsibility, business strategy and governance performance. Management Decision, 61(10), 3106–3143. https://doi.org/10.1108/MD-09-2022-1308

Estiasih, S. P., Suhardiyah, M., Suharyanto, M., Putra, A. C., & Widhayani, P. S. (2024). The Effects of Leverage, Firm Size, and Market Value on Financial Performance in Food and Beverage Manufac-turing Firms. Jurnal Aplikasi Manajemen, 22(2), 414–425. https://doi.org/10.21776/ub.jam.2024

Feng, Y., Akram, R., Hieu, V. M., & Tien, N. H. (2022). The impact of corporate social responsibility on the sustainable financial performance of Italian firms: mediating role of firm reputation. Economic Research-Ekonomska Istrazivanja , 35(1), 4740–4758. https://doi.org/10.1080/1331677X.2021.2017318

Garg, V., & Agarwal, S. (2021). An Empirical Study on the Corporate Social Responsibility Regime in India: Pre-COVID and COVID Times. Review of Market Integration, 13(2–3), 124–153. https://doi.org/10.1177/09749292221093835

Goel, A., & Sharma, R. (2017). Effect of Board Size on Firm’s Performance: Evidences from India. https://www.researchgate.net/publication/346030618

Hakimi, A., Boussaada, R., & Karmani, M. (2023). Corporate social responsibility and firm performance: a threshold analysis of European firms. European Journal of Management and Business Economics. https://doi.org/10.1108/EJMBE-07-2022-0224

Hatane, S. E., Telim, J. H., Tjanlisan, R., Tandiono, G. A., & Tjandra, M. (2021). Corporate Social Responsibility Performance and Ownership Structures adding Value to Indonesiaâ€TMs Banking Sector. Indonesian Journal of Sustainability Accounting and Management, 5(1), 91–102. https://doi.org/10.28992/ijsam.v5i1.191

Hazaea, S. A., Al-Matari, E. M., Farhan, N. H. S., & Zhu, J. (2023). The impact of board gender diversity on financial performance: a systematic review and agenda for future research. In Corporate Governance (Bingley) (Vol. 23, Issue 7, pp. 1716–1747). Emerald Publishing. https://doi.org/10.1108/CG-07-2022-0302

Hyun Kim, S., Min Cha, J., Cichy, R. F., Ran Kim, M., & Tkach, J. L. (2012). Effects of the size of the board of directors and board involvement in strategy on a private club’s financial performance. International Journal of Contemporary Hospitality Management, 24(1), 7–25. https://doi.org/10.1108/09596111211197773

Innayah, M. N., & Pratama, B. C. (2021). Board Diversity and Its Effects on Firm Performance and Risk: A Study in Banking Firms. Journal of Accounting and Investment, 22(1), proofreading. https://doi.org/10.18196/jai.v22i1.10005

Jabari, H. N., & Muhamad, R. (2020). Gender diversity and financial performance of Islamic banks. Journal of Financial Reporting and Accounting, 19(3), 412–433. https://doi.org/10.1108/JFRA-03-2020-0061

Jiang, L., Cherian, J., Sial, M. S., Wan, P., Filipe, J. A., Mata, M. N., & Chen, X. (2021). The moderating role of CSR in board gender diversity and firm financial performance: empirical evidence from an emerging economy. Economic Research-Ekonomska Istrazivanja , 34(1), 2354–2373. https://doi.org/10.1080/1331677X.2020.1863829

Kabir, A., Ikra, S. S., Saona, P., & Azad, Md. A. K. (2023). Board gender diversity and firm performance: new evidence from cultural diversity in the boardroom. LBS Journal of Management & Research, 21(1), 1–12. https://doi.org/10.1108/lbsjmr-06-2022-0022

Karim, S., Manab, N. A., & Ismail, R. B. (2020). The dynamic impact of board composition on CSR practices and their mutual effect on organizational returns. Journal of Asia Business Studies, 14(4), 463–479. https://doi.org/10.1108/JABS-07-2019-0214

Kaur, N., & Singh, V. (2020). Empirically examining the impact of corporate social responsibility on financial performance: evidence from Indian steel industry. Asian Journal of Accounting Research, 6(2), 134–151. https://doi.org/10.1108/AJAR-07-2020-0061

Ki, Y. H., & Adhikari, R. (2023). Cash Holdings and Marginal Value of Cash across Different Age Groups of U.S. Firms. Journal of Risk and Financial Management, 16(11). https://doi.org/10.3390/jrfm16110484

Wibowo, Y. K., & Honggowati, S. (2022). The Influence Of Firm Age On Profitability Performance Of Indonesian Manufacturing Companies With The Age Level Of Directors As Moderating Variable. In Jurnal Akuntansi dan Bisnis (Vol. 22, Issue 2). www.jab.fe.uns.ac.id

Laksmi, A. C., & Hasri, A. P. (2022). Influence of Corporate Social Responsibility Disclosure on financial performance of manufacturing companies listed on Indonesia Stock Exchange. Jurnal Akuntansi Dan Auditing Indonesia, 26(1), 2022. https://doi.org/10.20885/jaai.vol26.i

Lee, H. H., Liang, W. L., Tran, Q. N., & Truong, Q. T. (2024). Do Old Board Directors Promote Corporate Social Responsibility? Journal of Business Ethics. https://doi.org/10.1007/s10551-024-05681-4

Li, X., Esfahbodi, A., & Zhang, Y. (2024). The Impact of Corporate Social Responsibility Implementation on Enterprises’ Financial Performance—Evidence from Chinese Listed Companies. Sustainability (Switzerland) , 16(5). https://doi.org/10.3390/su16051848

Ma, C., Chishti, M. F., Durrani, M. K., Bashir, R., Safdar, S., & Hussain, R. T. (2023). The Corporate Social Responsibility and Its Impact on Financial Performance: A Case of Developing Countries. Sustainability (Switzerland), 15(4). https://doi.org/10.3390/su15043724

Ma, C., & Yasir, L. (2023). Carrot or Stick? CSR and Firm Financial Performance. Journal of Business Ethics, 188(2), 349–365. https://doi.org/10.1007/s10551-023-05336-w

Magoma, A., & Ernest, E. (2023). The impact of board gender diversity on financial performance of listed firms in Tanzania: A panel analysis. International Journal of Research in Business and Social Science (2147- 4478), 12(3), 78–87. https://doi.org/10.20525/ijrbs.v12i3.2511

Maji, S. G., & Saha, R. (2021). Gender diversity and financial performance in an emerging economy: empirical evidencefrom India. Management Research Review, 44(12), 1660–1683. https://doi.org/10.1108/MRR-08-2020-0525

Mansour, M., Al Zobi, M. K., Al-Naimi, A., & Daoud, L. (2023). “The connection between Capital structure and performance: Does firm size matter?” Investment Management and Financial Innovations, 20(1), 195–206. https://doi.org/10.21511/imfi.20(1).2023.17

McKinsey, & Company. (2024). Women in the Workplace 2024: Designed Report.

Naciti, V., Noto, G., Vermiglio, C., & Barresi, G. (2022). Gender representation and financial performance: an empirical analysis of public hospitals. International Journal of Public Sector Management, 35(5), 603–621. https://doi.org/10.1108/IJPSM-01-2022-0004

Nguyen, N. T. T., Nguyen, N. P., & Thanh Hoai, T. (2021). Ethical leadership, corporate social responsibility, firm reputation, and firm performance: A serial mediation model. Heliyon, 7(4). https://doi.org/10.1016/j.heliyon.2021.e06809

Orozco, L. A., Vargas, J., & Galindo-Dorado, R. (2018). Trends on the relationship between board size and financial and reputational corporate performance: The Colombian case. European Journal of Management and Business Economics, 27(2), 183–197. https://doi.org/10.1108/EJMBE-02-2018-0029

Pandey, N., Kumar, S., Post, C., Goodell, J. W., & García-Ramos, R. (2023). Board gender diversity and firm performance: A complexity theory perspective. Asia Pacific Journal of Management, 40(3), 1289–1320. https://doi.org/10.1007/s10490-022-09817-w

Pratiwi, R. D., & Chariri, A. (2021). Effectiveness of The Board of Directors and Company Performance: Corporate Governance Perspective in Indonesia. Jurnal Penelitan Ekonomi Dan Bisnis, 6(1), 17–27. https://doi.org/10.33633/jpeb.v6i1.4351

Rahim, S., Safitra, H., & Putra, A. H. P. K. (2024). Sustainability Report and Financial Performance: Evidence from Mining Companies in Indonesia. International Journal of Energy Economics and Policy, 14(1), 673–685. https://doi.org/10.32479/ijeep.14994

Semenov, A. V., & Randrianasolo, A. (2023). Advertising intensity and firm performance: the influences of firm age and cultural communication styles. International Marketing Review, 40(2), 265–289. https://doi.org/10.1108/IMR-12-2021-0355

Singh, K., Shakti Vishwavidyalaya, G., & Misra, M. (2018). Corporate Social Responsibility (CSR): An Investment Opportunity or a Forced Expenditure. www.iaraedu.com

Siueia, T. T., Wang, J., & Deladem, T. G. (2019). Corporate Social Responsibility and financial performance: A comparative study in the Sub-Saharan Africa banking sector. Journal of Cleaner Production, 226, 658–668. https://doi.org/10.1016/j.jclepro.2019.04.027

Suttipun, M., Lakkanawanit, P., Swatdikun, T., & Dungtripop, W. (2021). The impact of corporate social responsibility on the financial performance of listed companies in thailand. Sustainability (Switzerland), 13(16). https://doi.org/10.3390/su13168920

Tao, J., Shan, P., Liang, J., & Zhang, L. (2024). Influence Mechanism between Corporate Social Responsibility and Financial Sustainability: Empirical Evidence from China. Sustainability (Switzerland) , 16(6). https://doi.org/10.3390/su16062406

Simanjuntak, O. T. W., Bagus Wardianto, K., Mulkhan, U., & Author, C. (2022). International Journal of Advanced Multidisciplinary Research and Studies The effect of firm age, firm size on financial performance with financial inclusion as intervening variable: Study on the go public banking sector in Indonesia for the 2015-2020 period. In Int. j. adv. multidisc. res. stud (Vol. 2, Issue 3). www.multiresearchjournal.com

Yang, M., Wang, J., Maresova, P., & Akbar, M. (2022). Can the spending of corporate social responsibility be offset? Evidence from pharmaceutical industry. Economic Research-Ekonomska Istrazivanja , 35(1), 6279–6303. https://doi.org/10.1080/1331677X.2022.2048194

Yaqoob Moohammad, A., Nor’aini, Y., & Kamal, E. M. (2014). Influences of Firm Size, Age and Sector on Innovation Behaviour of Construction Consultancy Services Organizations in Developing Countries. In Business Management Dynamics (Vol. 4, Issue 4). www.bmdynamics.com

Downloads

Published

2025-06-30

How to Cite

Valentina, B., Zaharah, P., & Utha, M. A. (2025). Corporate Social Responsibility, Corporate Characteristics, and Financial Performance: Evidence from Indonesian Banks. Jurnal Ilmu Manajemen Advantage, 9(1), 120–136. https://doi.org/10.30741/adv.v9i1.1483

Issue

Section

Articles