Corporate Social Responsibility in Emerging Economies: Exploring Sustainable Shareholder Value (Indonesia Context)

This research proposes sustainability approach to mediate the conflicting arguments between shareholder value theory and stakeholder theory related to CSR in emerging economies. This research aims to prove whether companies which implement CSR consistently are able to create sustainable shareholder value as implied by sustainability approach. The research sample includes all listed firms except finance sector and has at least 5 years implementation of CSR since 2007. There are 214 observations that meet the sample criteria. Sustainable shareholder value is proxied by earning persistence and cumulative abnormal return (CAR), each represents accounting-based and market-based measurement. Data are analysed by using Eviews 8. The results support the argumentation of sustainability approach that CSR has a significant positive association with sustainable shareholder value. There are different models of association between high and low industry profiles. The results of the study open various venues for future research, include exploring the value of CSR from various other stakeholders view, using source other than annual report in order to improve the validity of CSR measurement and investigating the implementation issues of CSR at the corporate level. In addition, lengthier period of study after a certain interval of implementation is suggested to strengthen the argumentation of sustainability approach.