The effects of corporate social responsibility on financial performance on Indonesian public
listed tobacco companies



Volume 4, Issue 6
Siti Maimunah Yahya Senawat, Srihadi Winarningsih Zarkasyi, Ida Farida Abdul Gafur

Published online: 15 December 2018
Article Views: 33

This research aims to examine the effect of Corporate Social Responsibility (CSR) information revealed in the company’s annual report on company financial performance. CSR is proxies in an independent variable which are Economy performance (X1), Environment Performance (X2) and Social Performance (X3). On the other hands, financial performance is proxies by four dependent variables, which are the Current Ratio (Y1), Debt Ratio (Y2), Net Profit Margin (Y3) and Return on Assets (Y4) on tobacco listed in Indonesia Stock Exchange. Research method used is panel data analysis using EViews 9 software. Purposive sampling is chosen, and three companies are used as the sample. Data used in this research is an annual financial report of tobacco sub-sector companies audited in the 2010-20117 period. Based on the examination report CSR can only explain one of four financial performance measurements, that is Debt Ratio around 62.6%. Meanwhile, for other financial performance measurements such as the Current Ratio, Net Profit Margin and Return on Asset, CSR has not explained. All and all it can be concluded that CSR activity cannot quite describe company’s financial performance. It can be seen through hypothesis testing result (test-F, test-t) as well as the measurement of data panel model goodness as in determination coefficient (R-Square). The findings are helpful for policymakers to improve the financial performance of the organizations.