The Effect of Corporate Social Responsibility on The Persistence of Financial Performance

Abstract

The company's financial performance, especially reported earnings, is not an independent variable to influence investors' decisions. A number of studies have shown evidence that investors' responses to financial performance are greater when companies have high concern for social and environmental problems. This study aims to obtain evidence that the fulfillment of economic-socio-ecological responsibilities is a determinant that can drives financial performance sustainability. This study took a sample of 69 public companies in Indonesia with an observation period of 10 years. Multiple univariate regression model was applied to test the research hypothesis. The results of the study indicate that the fulfillment of economic-socio-ecological responsibilities triggers the sustainability of the company's financial performance. The results of this study have implications for business practices. First, it is important for companies to fulfill their economic-socio-ecological responsibilities to gain legitimacy and stakeholder support. Second, the fulfillment of economic-socio-ecological responsibilities is important to be disclosed to the public so that stakeholders can assess the risks and prospects of the company based on social and environmental factors. Fulfillment of economic-socio-ecological responsibilities is important to disclosed to the public to assess the risks and prospects of the company based on social and environmental factors.