Optimization of Monetary Corporate Social Responsibility Value Added in Reducing Financial Distress in Indonesia

Nila Tristiarini, Yulita Setiawanta and Ririh Dian Pratiwi
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Nila Tristiarini: Faculty of Economics and Business, Dian Nuswantoro University, Semarang, Indonesia,
Yulita Setiawanta: Faculty of Economics and Business, Dian Nuswantoro University, Semarang, Indonesia,
Ririh Dian Pratiwi: Faculty of Economics and Business, Dian Nuswantoro University, Semarang, Indonesia

International Journal of Economics and Financial Issues, 2017, vol. 7, issue 2, 500-506

Abstract: This study tried to investigate about a form of solution model and new empirical evidence which is not only related to how the effect of the application of corporate social responsibility (CSR) to improve financial performance (FP) but also the measurement of benefits and costs of CSR activities as corporate strategy that allows to reduce financial distress so as to improve the FP of the company. The study sample was the whole companies which are included in the SRI-KEHATI index in 2009-2015, a total sample of 175 companies. This study used analysis tools structural equation modeling with a 3.00 version WarpPLS program to test the hypothesis. Outcomes of this research is that company can determine the optimization of CSR in terms of benefits and costs so that it can be used as a strategy for policy making in implementing CSR activities that can have positive implications on the sustainability of the company.

Keywords: Corporate Social Responsibility; Financial Distress Reduction; Financial Performance; Financial Risk Management (search for similar items in EconPapers)
JEL-codes: G1 G3 M4 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2017-02-65

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