HOW FINANCIAL STRENGTH AND INTELLECTUAL CAPITAL DRIVE CORPORATE SOCIAL RESPONSIBILITY - A STAKEHOLDER PERSPECTIVE

Abstract

This study aims to analyse the effect of profitability (ROE and ROA), leverage (DER), intellectual capital (IC), liquidity (CR), and firm size (FZ) on Corporate Social Responsibility (CSR) in companies listed on the Jakarta Islamic Index (JII). This study uses the Ordinary Least Square, Random Effect, and Robustness Test methods to evaluate the relationship between these variables in the context of Stakeholder Theory. The results show that ROE has a significant negative effect on CSR, which indicates that companies with high profitability tend to focus more on the interests of shareholders than on social responsibility. On the other hand, ROA and IC have a significant positive effect on CSR, which means that companies with high asset-based profitability and strong intellectual capital are more active in CSR activities. Meanwhile, DER and CR have no significant effect on CSR, indicating that leverage and liquidity levels are not the main factors in determining CSR policies. In addition, firm size (FZ) has a significant positive influence on CSR, which indicates that large companies are more active in CSR because they have greater resources and face higher pressure from stakeholders. This finding confirms that a company's involvement in CSR is strongly influenced by the interests of stakeholders, as explained in Stakeholder Theory. This study provides insights for companies in designing CSR policies that are in line with stakeholder expectations and long-term business strategies.

Keywords

• corporate social responsibility
• profitability
• leverage
• intellectual capital
• stakeholder theory