Search results

This study aims to investigate the relationship between social impact, corporate social responsibility (CSR) reporting and firm performance in the context of the Association of Southeast Asian Nations (ASEAN) banking industry, providing insight into CSR-performance nexus debate, especially for non-environmentally sensitive industry (NESI).

We use a sample of 27 publicly listed banks in five ASEAN member countries (i.e. Indonesia, Malaysia, Singapore, Philippines and Thailand), with the period of observations ranged from 2011 to 2019 year. This study also carefully accounts for endogeneity issues and the dynamics of social impact – CSR reporting – bank financial performance relationship.

The results show that social impact (performance) and CSR reporting negatively associate with bank performance, either measured by accounting performance or market performance. The negative association between social performance and bank financial performance also persists in a longer-term relationship. This result implies that social performance and CSR might not have the expected result for banks in ASEAN developing countries and the expected effect also does not manifest in the following periods.

The negative association between social performance and financial performance implies that banks’ CSR in ASEAN might be misstargeted or that it takes more time to manifest the expected outcome. Therefore, banks should be able to foresee if social investment will finally offset the opportunity cost from diverting financial resources away from their core activities. On the other hand, policymakers must standardize the reporting related to social activities for banks and should bring the environmental and social issues to the depositors’ attention to show that these issues are also relevant in the banking industry.

To the best of the authors’ knowledge, this study is among the first to provide empirical evidence on the direct relationship between social impact, CSR reporting and firm performance in the context of ASEAN’s NESI. The results should be of potential interest value to ASEAN’s banks, regulators and shareholders.

The first alternative is to enrich shareholding by management. The basic theory of this research is the agency theory. This study aims to examine the institutional ownership, dividend policy, debt policy, and risk that are interconnected directly or indirectly. The research sample was a non-financial company from 2010 to 2014. Four variables will be tested using Two-stage Least Square (2SLS) in the SPSS application. The result of this study represents the overall interdependency relationship among institutional ownership, dividend policy, debt policy, and risk. The research outcome signifies an interdependency relation for endogenous variables, even if some exogenous variables have no significant relation. In addition, the effects of substitution between institutional ownership and dividend policy, debt policy and dividend policy, and institutional ownership and risk. Meanwhile, institutional ownership and dividend policy, risk and dividend policy, and risk and debt policy have no substitution effect.