Diversification and corporate social performance in manufacturing companies

Dina Patrisia () and Shabbir Dastgir ()
Additional contact information
Dina Patrisia: University of Huddersfield
Shabbir Dastgir: University of Huddersfield

Eurasian Business Review, 2017, vol. 7, issue 1, No 6, 139 pages

Abstract: Abstract The effects of diversification on financial performance are well-established, less so the way in which diversification influences company behaviour towards stakeholder demand and social concern. This paper investigates the relationship between business diversification and corporate social performance (CSP) in an industrial setting, in Indonesia. CSP is measured with an index constructed from content and disclosure analysis of annual company reports in line with global reporting initiative standards. A sample of 107 listed manufacturing companies from the Indonesian Stock Exchange is used to estimate a lagged multiple regression model to show that industry-level diversification does not have an effect on CSP. However, distinguishing between related and unrelated diversification produces a different outcome whereby, related diversification is negatively and statistically significantly correlated with CSP. Unrelated diversification, on the other hand, shows a positive and statistically significant relationship. It means the relationship between unrelated diversification and CSP is more positive than the relationship between related diversification and CSP. The findings offer a unique insight into industrial diversification and CSP in Indonesia’s expanding manufacturing sector.

Keywords: Diversification; Related diversification; Unrelated diversification; CSP; Manufacturing; Indonesia (search for similar items in EconPapers)
JEL-codes: L25 M14 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s40821-016-0052-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:eurasi:v:7:y:2017:i:1:d:10.1007_s40821-016-0052-6

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40821

DOI: 10.1007/s40821-016-0052-6

Access Statistics for this article

Eurasian Business Review is currently edited by Marco Vivarelli

More articles in Eurasian Business Review from Springer, Eurasia Business and Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().