The effect of corporate social performance on financial performance with firm size as a control variable

Abstract

Purpose: The purpose of this study is to examine whether the variables of social performance and corporate financial performance affect each other. Methodology: The research has used quantitative methods, namely, regression testing, in the form of descriptive statistics and multiple regression analysis. The data obtained in this research are analyzed by using the Statistical Product and Service Solutions (SPSS) program, version 22. In order to answer the study objectives, the researcher analyzes the mining companies listed on the Indonesian Stock Exchange (IDX). Results: The results of this study indicate that social performance has a significant positive effect on corporate financial performance; this is as per good management theory. Furthermore, it was found that financial performance has a significant positive effect on corporate social performance; this is as per slack resources theory. Implication: This study implies that social performance can help firms to improve social performance. Hence, a firm should consider depositing its profitability to increase social performance that may lead to the improvement of firm performance.