CSR Expenditure Effect to the Financial Performance on the Mining and Financial Service Companies in Indonesia

Abstract

Corporate social responsibility furthermore could be named by CSR. CSR has become more serious in the corporate strategy and concern issues. The Government also takes this seriously, in Indonesia for example, there are many rules that stated the company must do the CSR. The purpose of this study to make people understand about the importance/ not of CSR with empirical way. Moreover, in this research there are also studies between mining sector and financial service CSR expenditure effect to the financial performance, to help people understand the difference of the effect between the business sector that really close to the CSR and pretty far with CSR. This research using extensive data in the mining sector and financial service over the period of 2005-2014, explores and tests the sign of the relationship between corporate social responsibility and financial performance. The data set includes the representatives, mining and financial services company from LQ45 index. The data will processed into ROA, ROE, and EVA. After that, the data will be tested with CSR expense by the simple linear regression method using SPSS Statistic software for determining the relation. The result of this study will help companies, especially mining and banking in order of actionable decision making that related to the CSR.

Keywords: CSR, Finance, ROA, ROE, EVA, Sustainability

Australian Academy of Accounting and Finance Review, vol 1, issue 2, October 2015, page 160-180