The role of corporate social responsibility as a moderating factor in influencing bank performance in Indonesia
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Received July 28, 2023;Accepted December 8, 2023;Published December 15, 2023
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Author(s)Link to ORCID Index: https://orcid.org/0000-0002-6428-3615Link to ORCID Index: https://orcid.org/0009-0005-2233-9130Link to ORCID Index: https://orcid.org/0009-0003-4616-0165Link to ORCID Index: https://orcid.org/0000-0001-5076-0102Link to ORCID Index: https://orcid.org/0009-0004-3383-5108
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DOIhttp://dx.doi.org/10.21511/bbs.19(1).2024.01
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Article InfoVolume 19 2024, Issue #1, pp. 1-11
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An important factor in increasing public trust in banks is to show bank performance, so it is necessary to know the factors that influence bank performance. Therefore, it is important to attract the attention of bank management. This study aims to determine the factors influencing bank performance by using social responsibility as a moderating variable. This study involved 20 banks in Indonesia and used a quantitative approach. Secondary data sources were used for data collection and analyzed using a regression equation model. The results show that non-performing loans and bank size have no effect on bank performance. Meanwhile, loan-to-deposit ratio and corporate social responsibility have a positive effect at the 1% significance level. The results of testing the moderation effect obtained t-statistic values of –0.365 and –4.269. These results show that social responsibility has a negative effect, does not moderate the relationship between non-performing loans and bank performance, but has a negative effect, moderating the relationship between the loan-to-deposit ratio and bank performance. These findings have policy implications for bank performance through the implementation of corporate social responsibility policies.
Acknowledgments
The authors would like to thank the DPPMP of Stikubank University for supporting the funding of this research. Thanks also to the NGEJUS - FEB Unisbank team who helped provide the facilities needed for this study.
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JEL Classification (Paper profile tab)G20, G21, M14
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References45
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Tables6
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Figures0
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- Table 1. Description of variables
- Table 2. Summary statistical description
- Table 3. Determination coefficient
- Table 4. ANOVA
- Table 5. Regression coefficient, t-value, and t significance
- Table 6. Expected and actual hypotheses
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Conceptualization
Bambang Sudiyatno, Elen Puspitasari
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Data curation
Bambang Sudiyatno, Batara Daniel Bagana, Siska Dwi Safitri
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Formal Analysis
Bambang Sudiyatno, Batara Daniel Bagana, Elen Puspitasari
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Investigation
Bambang Sudiyatno, Widhian Hardiyanti, Elen Puspitasari
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Methodology
Bambang Sudiyatno, Widhian Hardiyanti, Elen Puspitasari
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Validation
Bambang Sudiyatno, Widhian Hardiyanti
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Writing – original draft
Bambang Sudiyatno, Batara Daniel Bagana, Siska Dwi Safitri
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Software
Batara Daniel Bagana
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Visualization
Batara Daniel Bagana, Siska Dwi Safitri
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Project administration
Widhian Hardiyanti, Elen Puspitasari
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Resources
Widhian Hardiyanti, Elen Puspitasari
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Writing – review & editing
Widhian Hardiyanti, Elen Puspitasari, Siska Dwi Safitri
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Supervision
Elen Puspitasari
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Conceptualization
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Service quality, customers’ satisfaction, and profitability: an empirical study of Saudi Arabian insurance sector
Investment Management and Financial Innovations Volume 15, 2018 Issue #2 pp. 232-247 Views: 3429 Downloads: 571 TO CITE АНОТАЦІЯFinancial performance is the fundamental aspect to test the performance of the companies. The performance of insurance sector, like any other service industry, is supposed to depend significantly on customers. When it comes to customers, it is an established fact that customer satisfaction would be an important element. Customer satisfaction primarily depends on the quality of service it gets. It can be safely hypothesized that better service quality would lead to higher satisfaction, which would ultimately lead to higher profits for the company. Studies on this relationship in the insurance sector for Saudi Arabia are missing. Hence, this study aims at studying both the profitability of companies and quality of service and tries to relate it to customer satisfaction. The results are quite surprising, as the study establishes that although the qualities of services are found wanting in many areas, companies are earning good profits. A probable reason could be the statutory nature of the services. Nevertheless, this study recommends improving the quality of services and differentiating services between age groups for further improvement.
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The moderating role of firm size and interest rate in capital structure of the firms: selected sample from sugar sector of Pakistan
Sarfraz Hussain , Abdul Quddus , Pham Phat Tien , Muhammad Rafiq , Drahomíra Pavelková doi: http://dx.doi.org/10.21511/imfi.17(4).2020.29Investment Management and Financial Innovations Volume 17, 2020 Issue #4 pp. 341-355 Views: 3422 Downloads: 367 TO CITE АНОТАЦІЯThe selection of financing is a top priority for businesses, particularly in short- and long-term investment decisions. Mixing debt and equity leads to decisions on the financial structure for businesses. This research analyzes the moderate position of company size and the interest rate in the capital structure over six years (2013–2018) for 29 listed Pakistani enterprises operating in the sugar market. This research employed static panel analysis and dynamic panel analysis on linear and nonlinear regression methods. The capital structure included debt to capital ratio, non-current liabilities, plus current liabilities to capital as a dependent variable. Independent variables were profitability, firm size, tangibility, Non-Debt Tax Shield, liquidity, and macroeconomic variables were exchange rates and interest rates. The investigation reported that profitability, firm size, and Non-Debt Tax Shield were significant and negative, while tangibility and interest rates significantly and positively affected debt to capital ratio. This means the sugar sector has greater financial leverage to manage the funding obligations for the better performance of firms. Therefore, the outcomes revealed that the moderators have an important influence on capital structure.
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The effect of working capital management on profitability: a case of listed manufacturing firms in South Africa
Jason Kasozi doi: http://dx.doi.org/10.21511/imfi.14(2-2).2017.05Investment Management and Financial Innovations Volume 14, 2017 Issue #2 (cont. 2) pp. 336-346 Views: 3186 Downloads: 2647 TO CITE АНОТАЦІЯWorking capital management plays a pivotal role in enhancing the operational efficiency of firms and their ultimate profitability. Therefore, the purpose of this study was to examine the trends in working capital management and its impact on the financial performance of listed manufacturing firms on the Johannesburg Securities Exchange (JSE). A panel data methodology was used with different regression estimators to analyze this relationship based on an unbalanced panel of 69 manufacturing firms listed during the period 2007–2016.
The findings revealed that the average collection period and the average payment period are negative and statistically significant for profitability, implying that firms which efficiently manage their accounts receivable and those that pay their creditors on time perform better than those that do not. Additionally, a positive statistically significant relationship between the number of days in inventory and profitability was supported suggesting that firms which stock-up and maintain their inventory levels suffer less from stock-outs and avoid challenges of securing financing when needed. This increases their operational efficiency and ensures profitability in the long run. It could not be ascertained whether a shorter or longer cash conversion cycle enhances firm profitability, since findings to support this premise were weak. However, it was observed that manufacturing firms are on average, carrying lot of debt in their capital structures.
The present study contributes to existing literature by presenting one of the very recent findings on this topic while simultaneously testing the validity of recent local and international methodologies, in order to inform policy change.