THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE TO FINANCIAL PERFORMANCE ON ISLAMIC BANKING IN INDONESIA
The practice of Corporate Social Responsibility (CSR) becomes a substantial matter for Islamic banking concerning their moral obligations. Hence, the practice of Corporate Social Responsibility Disclosure (CSRD) becomes notable in order to convince all parties including the stockholders, stakeholder...
Saved in:
| Main Author: | |
|---|---|
| Format: | Final Project |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/63932 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | The practice of Corporate Social Responsibility (CSR) becomes a substantial matter for Islamic banking concerning their moral obligations. Hence, the practice of Corporate Social Responsibility Disclosure (CSRD) becomes notable in order to convince all parties including the stockholders, stakeholders, and society that they truly conduct CSR activities. In addition, to see how efficiently a company runs its business, it is prominent to look at its financial performance (FP), especially the profitability section. This study aims to examine the influence of CSRD on financial profitability performance in Islamic banking from 2016-2020 with 10 samples listed Islamic banks in the Sharia Banking Statistics report at the Financial Services Authority (OJK) in Indonesia. By adopting the CSRD index from a previous study which developed a comprehensive CSRD index from the Global Reporting Initiative (GRI) and the Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI) standards No.7 where the index consists of 5 dimensions and 105 sub-dimensions and using multiple regression analysis with the model of Random Effect (RE) on CSRD index as the independent variable, Non-Performing Financing (NPF), Capital Adequacy Ratio (CAR), and Bank Size as the control variables, also Return on Assets (ROA) as the dependent variable. This study revealed that CSRD has a positive relationship but does not significantly influence financial profitability performance. However, to increase profitability, Islamic banks in Indonesia suggested to conducts CSR practices focusing on Legal, Economic, and Philanthropic dimensions. Meanwhile, the Environment and Ethical dimensions need to be adjusted to influence the profitability of a bank. |
|---|