Does Corporate Social Performance (CSP) Matter After the Financial Crisis?
DOI:
https://doi.org/10.24090/ijtimaiyya.v5i2.3916Keywords:
Corporate Social Performance, Crisis, Content Analysis, Jakarta Islamic Index (JII)Abstract
This study aims to examine whether corporate social performance (CSP) increase after the crisis period. This study also examined whether CSP in the Jakarta Islamic Index (JII) member better than non-member JII. The content analysis method was used, and CSP data was measured using the item developed by Michael Jantzi Research Associate (MJRA) Inc. MJRA made a comprehensive measurement for measuring CSP. It dimensions consist of community issues, workplace diversity, environmental performance, employee relations, international issues, business practices and products, and others. The samples on this study are manufacturing companies listed in Indonesia Stock Exchange after the crisis period, 2009-2010. The result indicated that CSP in 2010 higher than in 2009. CSP in the member of JII also better than non-members of JII. This result indicated that CSP was relevant to the Jakarta Islamic Index member even after a crisis period.Downloads
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References
Ata, H. A., & Buğan, M. F. (2015). Comparison of the Performances Islamic and Conventional Market Indices and their Causal Relationship. International Journal of Business Management and Economic Research, 6(6), 455–462.
Auda, J. (2014). Maqasid Al-Shariah A Beginner Guide. The International Institute of Islamic Thought.
Bouslah, K., Kryzanowski, L., & M’Zali, B. (2018). Social Performance and Firm Risk: Impact of the Financial Crisis. Journal of Business Ethics, 149(3), 643–669. https://doi.org/10.1007/s10551-016-3017-x
Chen, L., Feldmann, A., & Tang, O. (2015). The relationship between disclosures of corporate social performance and financial performance: Evidences from GRI reports in manufacturing industry. International Journal of Production Economics, 170, 445–456. https://doi.org/10.1016/j.ijpe.2015.04.004
Cho, S. Y., & Lee, C. (2017). Managerial Efficiency, Corporate Social Performance, and Corporate Financial Performance. Journal of Business Ethics, pp. 1–20. https://doi.org/10.1007/s10551-017-3760-7
Choudhury, M. A., & Hoque, M. Z. (2006). Corporate governance in Islamic perspective. Corporate Governance, 6(2), 116–2006. https://doi.org/10.1108/14720700610655132
Cornett, M. M., Erhemjamts, O., & Tehranian, H. (2016). Greed or good deeds: An examination of the relation between corporate social responsibility and the financial performance of U.S. commercial banks around the financial crisis. Journal of Banking and Finance, 70, 137–159. https://doi.org/10.1016/j.jbankfin.2016.04.024
Donaldson, T., & Preston, L. E. (1995). The Stakeholder Theory of the Corporation : Concepts, Evidence, and Implications. The Academy of Management, 20(1), 65–91.
Ducassy, I. (2013). Does Corporate Social Responsibility Pay Off in Times of Crisis? An Alternate Perspective on the Relationship between Financial and Corporate Social Performance. Corporate Social Responsibility and Environmental Management, 20(3), 157–167. https://doi.org/10.1002/csr.1282
Dusuki, A. W., & Abdullah, N. I. (2007). Maqasid al-Sharì’ah, Maslahah, and Corporate Social Responsibility. The American Journal of Islamic Social Sciences, 24(1), 25–45. https://doi.org/10.1007/978-3-642-40535-8
Fauzi, H. (2008). The Determinants of the Relationship of Corporate Social Performance and Financial Performance: Conceptual Framework. Issues in Social and Environmental Accounting, 2(2), 233–259.
Fauzi, H. (2009). Corporate Social and Financial Performance: Empirical Evidence from American Companies. Globsyn Management Journal, 3(1), 25–34. Retrieved from http://papers.ssrn.com/sol3/Delivery.cfm?abstractid=1489494
Fauzi, H., & Idris, K. M. (2010). The Effect of Contextual Variables in the Relationship between CSR and CFP: Evidence from Indonesian Companies. Issues in Social & Environmental Accounting, 4(1), 40–64. Retrieved from http://esc-web.lib.cbs.dk/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=56504742&site=ehost-live&scope=site
Fauzi, H., Mahoney, L., & Rahman, A. A. (2007). Institutional Ownership and Corporate Social Performance: Empirical Evidence from Indonesian Companies. Issues In Social And Environmental Accounting, 1(2), 334. https://doi.org/10.22164/isea.v1i2.21
Forcadell, F. J., & Aracil, E. (2017). European Banks’ Reputation for Corporate Social Responsibility. Corporate Social Responsibility and Environmental Management, 24(1), 1–14. https://doi.org/10.1002/csr.1402
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing Inc.
Griffin, J. J., & Mahon, J. F. (1997). The corporate social performance and corporate financial performance debate: Twenty-five years of incomparable research. Business and Society, 36(1), 5–31. https://doi.org/10.1177/000765039703600102
Igalens, J. (2005). Measuring Corporate Social Performance in France : A Critical and Empirical Analysis of Measuring Corporate in France : A Critical Performance and Empirical Analysis of APRESE data. Journal of Business Ethics, 56(2), 131–148. https://doi.org/DOI: 10.1007/s10551-004-3529-7
IMF. (2011). Global Financial Stability Report (September 2011): Grappling with Crisis Legacies. Washington DC.
Kaplan, R. S., & Norton, D. P. (1992). The Balanced Scorecard Å“ Measures That Drive Performance. Harvard Business Review.
Khan, I., Khan, M., & Tahir, M. (2016). Performance comparison of Islamic and conventional banks: empirical evidence from Pakistan. International Journal of Islamic and Middle Eastern Finance and Management, 9(3), 134–149. https://doi.org/10.1108/17538391111144515
Landi, C. G., Rapone, V., Tuccillo, D., & Rey, A. (2019). Does Ethics Reward on Public Markets : Empirical Evidences Ten Years After the Great Recession, 10(3). https://doi.org/10.5430/ijba.v10n3p1
Lauesen, L. M. (2013). CSR in the aftermath of the financial crisis. Social Responsibility Journal, 9(4), 641–663. https://doi.org/10.1108/SRJ-11-2012-0140
Lin, J. Y. (2008). The Impact of the Financial Crisis on Developing Countries. Presented at the Korea Development Institute. Seoul. https://doi.org/10.1596/26129
Lins, K. V, Servaes, H., & Tamayo, A. (2017). Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis. Journal of Finance, 72(4), 1785–1824. https://doi.org/10.1111/jofi.12505
Masruki, R., Ibrahim, N., Osman, E., & Wahab, H. A. (2011). Financial performance of Malaysian Islamic banks versus conventional banks. Journal of Business and Policy Research, 6(2), 67–79.
McCulloch, N., & Grover, A. (2010). Menaksir Dampak Krisis Keuangan di Indonesia dengan Memadukan Studi Kualitatif Cepat dengan Survei Nasional. Jakarta.
Milhem, M. M., & Istaiteyeh, R. M. S. (2015). Financial performance of Islamic and conventional banks: Evidence from Jordan. Global Journal of Business Research, 9(3), 27–41.
Onakoya, A. B., & Onakoya, A. O. (2013). The Performance of Conventional and Islamic Banks in the United Kingdom: A Comparative Analysis. Journal of Research in Economics and International Finance (JREIF), 2(2), 29–38. Retrieved from http://www.interesjournals.org/JREIF
Platonova, E., Asutay, M., Dixon, R., & Mohammad, S. (2018). The Impact of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from the GCC Islamic Banking Sector. Journal of Business Ethics, 151(2), 451–471. https://doi.org/10.1007/s10551-016-3229-0
Pusparini, M. D. (2010). Konsep Kesejahteraan Dalam Ekonomi Islam (Perspektif Maqasid Asy-Syari’ah). Jurnal Economics Journal, 1(1), 45–59.
Rana, M. E., & Akhter, W. (2015). Performance of Islamic and conventional stock indices: empirical evidence from an emerging economy. Financial Innovation, 1(1), 15. https://doi.org/10.1186/s40854-015-0016-3
Saad, N. M., Majid, M. S. A., Kassim, S., Hamid, Z., & Yusof, R. M. (2010). A comparative analysis of the performance of conventional and Islamic unit trust companies in Malaysia. International Journal of Managerial Finance, 6(1), 24–47. https://doi.org/10.1108/17439131011015779
Sadeghi, G., Arabsaleh, M., & Hamavandi, M. (2016). Impact of corporate social performance on financial performance of manufacturing companies (IMC) listed on the Tehran Stock Exchange. International Journal of Law and Management, 58(6), 634–659. https://doi.org/http://dx.doi.org/10.1108/MRR-09-2015-0216
Shahzad, A. M., & Sharfman, M. P. (2017). Corporate Social Performance and Financial Performance: Sample-Selection Issues. Business and Society, 56(6), 889–918. https://doi.org/10.1177/0007650315590399
Souto, B. F.-F. (2009). Crisis and corporate social responsibility: threat or opportunity? International Journal of Economic Sciences and Applied Research, 2(1), 36–50.
Tambunan, T. T. H. (2010). The Indonesian Experience with Two Big Economic Crises. Modern Economy, 01(03), 156–167. https://doi.org/10.4236/me.2010.13018
The World Bank. (2009). Indonesia Economic Quarterly Weathering the Storm (No. 52095). Washington, DC. https://doi.org/10.1057/elmr.2009.85
Ullmann, A. A. (1985). Data in Search of a Theory: A Critical Examination of the Relationships Among Social Performance, Social Disclosure, and Economic Performance of U.S. Firms. Academy of Management Review, 10(3), 540–557. https://doi.org/10.5465/amr.1985.4278989
Waddock, S. A., & Graves, S. b. (1994). Institutional Owners and Corporate Social Performance. The Academy of Management Journal, 37(4), 1034–1046. https://doi.org/10.1146/annurev.soc.28.110601.140833
Wang, H., Lu, W., Ye, M., Chau, K. W., & Zhang, X. (2016). The curvilinear relationship between corporate social performance and corporate financial performance: Evidence from the international construction industry. Journal of Cleaner Production, 137, 1313–1322. https://doi.org/10.1016/j.jclepro.2016.07.184
Wang, Y., & Berens, G. (2015). The Impact of Four Types of Corporate Social Performance on Reputation and Financial Performance. Journal of Business Ethics, 131(2), 337–359. https://doi.org/10.1007/s10551-014-2280-y
Wardhana, W., Beik, I. S., & Setianto, R. H. (2011). Pasar Modal Syariah dan Krisis Keuangan Global. Iqtishodia. Jurnal Ekonomi Islam Republika, p. 24. Retrieved from ftp.unpad.ac.id › republika › republika_2011-01-27_024
Yelkikalan, N. (2012). the Effects of the Financial Crisis on Corporate Social Responsibility. International Journal of Business and Social Science, 3(3), 292–300. Retrieved from www.ijbssnet.com
Zeidan, M. J., Zaini, M., Karim, A., Yahya, M. H., Muhammad, J., Hadi, A. R. A., … Alslehat, F. (2013). The Financial Performance of Islamic vs Conventional Banks : An Empirical Study on The GCC & MENA Region. International Journal of Islamic and Middle Eastern Finance and Management, 5(2), 90. https://doi.org/10.1108/17538391111144515
Auda, J. (2014). Maqasid Al-Shariah A Beginner Guide. The International Institute of Islamic Thought.
Bouslah, K., Kryzanowski, L., & M’Zali, B. (2018). Social Performance and Firm Risk: Impact of the Financial Crisis. Journal of Business Ethics, 149(3), 643–669. https://doi.org/10.1007/s10551-016-3017-x
Chen, L., Feldmann, A., & Tang, O. (2015). The relationship between disclosures of corporate social performance and financial performance: Evidences from GRI reports in manufacturing industry. International Journal of Production Economics, 170, 445–456. https://doi.org/10.1016/j.ijpe.2015.04.004
Cho, S. Y., & Lee, C. (2017). Managerial Efficiency, Corporate Social Performance, and Corporate Financial Performance. Journal of Business Ethics, pp. 1–20. https://doi.org/10.1007/s10551-017-3760-7
Choudhury, M. A., & Hoque, M. Z. (2006). Corporate governance in Islamic perspective. Corporate Governance, 6(2), 116–2006. https://doi.org/10.1108/14720700610655132
Cornett, M. M., Erhemjamts, O., & Tehranian, H. (2016). Greed or good deeds: An examination of the relation between corporate social responsibility and the financial performance of U.S. commercial banks around the financial crisis. Journal of Banking and Finance, 70, 137–159. https://doi.org/10.1016/j.jbankfin.2016.04.024
Donaldson, T., & Preston, L. E. (1995). The Stakeholder Theory of the Corporation : Concepts, Evidence, and Implications. The Academy of Management, 20(1), 65–91.
Ducassy, I. (2013). Does Corporate Social Responsibility Pay Off in Times of Crisis? An Alternate Perspective on the Relationship between Financial and Corporate Social Performance. Corporate Social Responsibility and Environmental Management, 20(3), 157–167. https://doi.org/10.1002/csr.1282
Dusuki, A. W., & Abdullah, N. I. (2007). Maqasid al-Sharì’ah, Maslahah, and Corporate Social Responsibility. The American Journal of Islamic Social Sciences, 24(1), 25–45. https://doi.org/10.1007/978-3-642-40535-8
Fauzi, H. (2008). The Determinants of the Relationship of Corporate Social Performance and Financial Performance: Conceptual Framework. Issues in Social and Environmental Accounting, 2(2), 233–259.
Fauzi, H. (2009). Corporate Social and Financial Performance: Empirical Evidence from American Companies. Globsyn Management Journal, 3(1), 25–34. Retrieved from http://papers.ssrn.com/sol3/Delivery.cfm?abstractid=1489494
Fauzi, H., & Idris, K. M. (2010). The Effect of Contextual Variables in the Relationship between CSR and CFP: Evidence from Indonesian Companies. Issues in Social & Environmental Accounting, 4(1), 40–64. Retrieved from http://esc-web.lib.cbs.dk/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=56504742&site=ehost-live&scope=site
Fauzi, H., Mahoney, L., & Rahman, A. A. (2007). Institutional Ownership and Corporate Social Performance: Empirical Evidence from Indonesian Companies. Issues In Social And Environmental Accounting, 1(2), 334. https://doi.org/10.22164/isea.v1i2.21
Forcadell, F. J., & Aracil, E. (2017). European Banks’ Reputation for Corporate Social Responsibility. Corporate Social Responsibility and Environmental Management, 24(1), 1–14. https://doi.org/10.1002/csr.1402
Freeman, R. E. (1984). Strategic management: A stakeholder approach. Pitman Publishing Inc.
Griffin, J. J., & Mahon, J. F. (1997). The corporate social performance and corporate financial performance debate: Twenty-five years of incomparable research. Business and Society, 36(1), 5–31. https://doi.org/10.1177/000765039703600102
Igalens, J. (2005). Measuring Corporate Social Performance in France : A Critical and Empirical Analysis of Measuring Corporate in France : A Critical Performance and Empirical Analysis of APRESE data. Journal of Business Ethics, 56(2), 131–148. https://doi.org/DOI: 10.1007/s10551-004-3529-7
IMF. (2011). Global Financial Stability Report (September 2011): Grappling with Crisis Legacies. Washington DC.
Kaplan, R. S., & Norton, D. P. (1992). The Balanced Scorecard Å“ Measures That Drive Performance. Harvard Business Review.
Khan, I., Khan, M., & Tahir, M. (2016). Performance comparison of Islamic and conventional banks: empirical evidence from Pakistan. International Journal of Islamic and Middle Eastern Finance and Management, 9(3), 134–149. https://doi.org/10.1108/17538391111144515
Landi, C. G., Rapone, V., Tuccillo, D., & Rey, A. (2019). Does Ethics Reward on Public Markets : Empirical Evidences Ten Years After the Great Recession, 10(3). https://doi.org/10.5430/ijba.v10n3p1
Lauesen, L. M. (2013). CSR in the aftermath of the financial crisis. Social Responsibility Journal, 9(4), 641–663. https://doi.org/10.1108/SRJ-11-2012-0140
Lin, J. Y. (2008). The Impact of the Financial Crisis on Developing Countries. Presented at the Korea Development Institute. Seoul. https://doi.org/10.1596/26129
Lins, K. V, Servaes, H., & Tamayo, A. (2017). Social Capital, Trust, and Firm Performance: The Value of Corporate Social Responsibility during the Financial Crisis. Journal of Finance, 72(4), 1785–1824. https://doi.org/10.1111/jofi.12505
Masruki, R., Ibrahim, N., Osman, E., & Wahab, H. A. (2011). Financial performance of Malaysian Islamic banks versus conventional banks. Journal of Business and Policy Research, 6(2), 67–79.
McCulloch, N., & Grover, A. (2010). Menaksir Dampak Krisis Keuangan di Indonesia dengan Memadukan Studi Kualitatif Cepat dengan Survei Nasional. Jakarta.
Milhem, M. M., & Istaiteyeh, R. M. S. (2015). Financial performance of Islamic and conventional banks: Evidence from Jordan. Global Journal of Business Research, 9(3), 27–41.
Onakoya, A. B., & Onakoya, A. O. (2013). The Performance of Conventional and Islamic Banks in the United Kingdom: A Comparative Analysis. Journal of Research in Economics and International Finance (JREIF), 2(2), 29–38. Retrieved from http://www.interesjournals.org/JREIF
Platonova, E., Asutay, M., Dixon, R., & Mohammad, S. (2018). The Impact of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from the GCC Islamic Banking Sector. Journal of Business Ethics, 151(2), 451–471. https://doi.org/10.1007/s10551-016-3229-0
Pusparini, M. D. (2010). Konsep Kesejahteraan Dalam Ekonomi Islam (Perspektif Maqasid Asy-Syari’ah). Jurnal Economics Journal, 1(1), 45–59.
Rana, M. E., & Akhter, W. (2015). Performance of Islamic and conventional stock indices: empirical evidence from an emerging economy. Financial Innovation, 1(1), 15. https://doi.org/10.1186/s40854-015-0016-3
Saad, N. M., Majid, M. S. A., Kassim, S., Hamid, Z., & Yusof, R. M. (2010). A comparative analysis of the performance of conventional and Islamic unit trust companies in Malaysia. International Journal of Managerial Finance, 6(1), 24–47. https://doi.org/10.1108/17439131011015779
Sadeghi, G., Arabsaleh, M., & Hamavandi, M. (2016). Impact of corporate social performance on financial performance of manufacturing companies (IMC) listed on the Tehran Stock Exchange. International Journal of Law and Management, 58(6), 634–659. https://doi.org/http://dx.doi.org/10.1108/MRR-09-2015-0216
Shahzad, A. M., & Sharfman, M. P. (2017). Corporate Social Performance and Financial Performance: Sample-Selection Issues. Business and Society, 56(6), 889–918. https://doi.org/10.1177/0007650315590399
Souto, B. F.-F. (2009). Crisis and corporate social responsibility: threat or opportunity? International Journal of Economic Sciences and Applied Research, 2(1), 36–50.
Tambunan, T. T. H. (2010). The Indonesian Experience with Two Big Economic Crises. Modern Economy, 01(03), 156–167. https://doi.org/10.4236/me.2010.13018
The World Bank. (2009). Indonesia Economic Quarterly Weathering the Storm (No. 52095). Washington, DC. https://doi.org/10.1057/elmr.2009.85
Ullmann, A. A. (1985). Data in Search of a Theory: A Critical Examination of the Relationships Among Social Performance, Social Disclosure, and Economic Performance of U.S. Firms. Academy of Management Review, 10(3), 540–557. https://doi.org/10.5465/amr.1985.4278989
Waddock, S. A., & Graves, S. b. (1994). Institutional Owners and Corporate Social Performance. The Academy of Management Journal, 37(4), 1034–1046. https://doi.org/10.1146/annurev.soc.28.110601.140833
Wang, H., Lu, W., Ye, M., Chau, K. W., & Zhang, X. (2016). The curvilinear relationship between corporate social performance and corporate financial performance: Evidence from the international construction industry. Journal of Cleaner Production, 137, 1313–1322. https://doi.org/10.1016/j.jclepro.2016.07.184
Wang, Y., & Berens, G. (2015). The Impact of Four Types of Corporate Social Performance on Reputation and Financial Performance. Journal of Business Ethics, 131(2), 337–359. https://doi.org/10.1007/s10551-014-2280-y
Wardhana, W., Beik, I. S., & Setianto, R. H. (2011). Pasar Modal Syariah dan Krisis Keuangan Global. Iqtishodia. Jurnal Ekonomi Islam Republika, p. 24. Retrieved from ftp.unpad.ac.id › republika › republika_2011-01-27_024
Yelkikalan, N. (2012). the Effects of the Financial Crisis on Corporate Social Responsibility. International Journal of Business and Social Science, 3(3), 292–300. Retrieved from www.ijbssnet.com
Zeidan, M. J., Zaini, M., Karim, A., Yahya, M. H., Muhammad, J., Hadi, A. R. A., … Alslehat, F. (2013). The Financial Performance of Islamic vs Conventional Banks : An Empirical Study on The GCC & MENA Region. International Journal of Islamic and Middle Eastern Finance and Management, 5(2), 90. https://doi.org/10.1108/17538391111144515
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Published
2020-09-25
How to Cite
Ahmad, Z. A., & Yandra, F. P. (2020). Does Corporate Social Performance (CSP) Matter After the Financial Crisis?. Ijtimā Iyya Journal of Muslim Society Research, 5(2), 143–156. https://doi.org/10.24090/ijtimaiyya.v5i2.3916
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Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
