THE ROLE OF COMPANY REPUTATION AS A MODERATING VARIABLE IN THE RELATIONSHIP BETWEEN CSR AND FIRM PERFORMANCE

Abstract

Purpose: This study focuses on whether the company's reputation moderates the role of CSR in improving financial performance. Method/Design/Approach: This research was conducted on companies that follow the Corporate Image Index (CII) 2015-2019 and are listed on the Indonesian Stock Exchange. A company's CII score indicates its reputation level. A total of 180 observations met the research sample criteria. Results and Conclusion: The results indicate that CSR has no direct relationship with good financial performance. However, reputation has a positive effect on financial performance. It has been proven that the more reputable a company is, the stronger its appeal to improve financial performance. Interestingly, when CSR is moderated by reputation, it shows a positive relationship with financial performance. Research Implications: These results contribute to fixing previous findings by confirming the role of a firm's reputation in the association between CSR and firm performance. Therefore, ignoring a firm's reputation will mislead the conclusion of the benefits of CSR.