Liquidity Moderating the Effect of Production Resources, Investment Decisions and Corporate Social Responsibility on Corporate Performance

Roristua Pandiangan ,Etty Murwaningsari

doi:10.7176/rjfa/10-20-03

Abstract

The purpose of this study investigates the effect of simultaneous and partial production resources, investment decision, and corporate social responsibility on company performance and investigate liquidity as a moderating variable on the effect of production resources, investment decisions, corporate social responsibility on corporate performance.The population of this research is 148 manufacturing companies listed on the Indonesia Stock Exchange, the selection of research samples using purposive sampling method with criteria revealed the realization of CSR expenses in the 2016-2018 period so that 77 manufacturing companies were obtained with 3 years of observation and 231 years of corporate data were obtained, data analysis method used multiple regression analysis and moderate regression analysis (MRA).Research findings: 1) Production Resources, Investment Decisions, Corporate Social Responsibility simultaneously influence and significantly affect Corporate Performance. 2) Production Resources have a negative and significant effect on Corporate Performance. 3) Investment Decisions have a positive and significant effect on Corporate Performance. 4) Corporate Social Responsibility have a positive and significant effect to corporate performance. 5) Liquidity moderates the effect of production resources to corporate performance. 6) Liquidity does not moderate the effect of investment decisions to corporate performance. 7) Liquidity does not moderate the effect of corporate social responsibility on corporate performance. Keywords: Corporate Performance, Production Resources, Investment Decisions, Corporate Social Responsibility, Liquidity. DOI : 10.7176/RJFA/10-20-03 Publication date :October 31 st 2019

Highlights

Burger King, Unilever, Nestle, Kraft Food stop buying palm oil produced by the Sinar Mas Group where the Sinar Mas group customers assume that the Sinar Mas Group is destroying tropical forests to open up oil palm plantations
Research methods The population of this research is 148 manufacturing companies listed on the Indonesia Stock Exchange, the selection of research samples using purposive sampling method with criteria revealing the realization of corporate social responsibility (CSR) expenses in the 2016-2018 period so that 77 manufacturing companies were obtained with 3 years of observation and 231 firm years data were obtained, Data analysis method used multiple regression analysis and moderate regression analysis (MRA)
Liquidity moderates the effect of production resources on corporate performance, liquidity does not moderate the influence of investment decisions on corporate performance and liquidity does not moderate the effect of corporate social responsibility to corporate performance

Summary

Introduction

Burger King, Unilever, Nestle, Kraft Food stop buying palm oil produced by the Sinar Mas Group where the Sinar Mas group customers assume that the Sinar Mas Group is destroying tropical forests to open up oil palm plantations. Funding originating from foreign banks for the divestment of 51% of PT. Indonesia Asahan Aluminum is hampered due to environmental issues, on the other side there are companies that do not deal with the obstacles in conducting the acquisition process such as MUFG Bank Ltd acquired Bank Danamon through Bank of Tokyo Mitsubishi UFJ, Ltd. (BTMU) through 2 stages and BCA took a corporate action by buying Bank Royal Indonesia. Decisions taken and implemented by each entity to maximize profit achievement and minimize the occurrence of business risks in the future. An entity seeks to keep maximizing the achievement of profit as the main goal and one measure of company performance, on the other side, it must still consider to the environmental and social conditions that are directly or indirectly related to the operations of the entity. Stewarship Theory says that management overrides his personal interests and chooses the interests of the organization so as to create good cooperation and mutual trust between management and the owner (agent costs are reduced, there is no asymmetrical information) in carrying out business operations (Donaldson & Davis, 1991; Zhang, et al, 2017; Subramanian, 2018; Chrisman, 2019; Schillemans & Bjurstrøm, 2019)

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Conclusion