The Link between Corporate Social Performance and Financial Performance: Evidence from Indonesian Companies

Abstract

This study examines the relationship of corporate social performance (CSP) to corporate financialperformance (CFP) to determine if CSP is related to firm performance. Additionally, itexamines whether firm size or industry affects the relationships between CSR and CSP. Thisstudy advances the literature as it examines this relationship for companies in a developingcountry, Indonesia, along with examining the impact of moderating variables on this relationship.Two models were developed: the first model was derived using slack resource theory andthe second model was developed using the good management theory. Through the examinationof 383 firms, the result of the study failed to find a significant relationship between CSP andCFP in either model. Further analysis, using the slack resource theory, did find that companysize had a significant positive moderating effect on the relationship between CSP and CFP.  Copyright © www.iiste.org