The Effect of Slack Resources on Strategic Corporate Social Responsibility (CSR): Empirical Evidence on Indonesian Listed Companies

Abstract

Objective - This study examines the effect of companies' slack resources on strategic Corporate Social Responsibility ('CSR') and also non-strategic CSR. By analysing the slack resources as a determinant of CSR, it might indicate the companies' priority regarding their strategic CSR as part of companies' strategy. Methodology/Technique - Instead of using profitability as a measure of slack resources, this study employs slack resources as a variable itself as it was developed by Burgeois (1981), based on financial data in the companies' financial statements. Findings - The empirical result of this study indicates that un-absorbed slack resources positively affect the strategic CSR and also non-strategic CSR of a company, while absorbed slack resources do not significantly affect either. Novelty - Unlike previous studies, this study does not use profitability as a proxy of slack resources, but uses slack resources as a variable itself. Type of Paper - Empirical Keywords: Slack Resources; Corporate Social Responsibility; Strategic CSR; Nonstrategic CSR; Slack Resources; Absorbed Slack Resources; Unabsorbed Slack Resources.