Unlocking Profitability: How CSR Practices Drive Financial Performance Through Green Innovation

Hery Haryanto; Cindy Hartono; Hesniati Hesniati

doi:10.24815/jdab.v12i1.39531

Unlocking Profitability: How CSR Practices Drive Financial Performance Through Green Innovation

Hery Haryanto, Cindy Hartono, Hesniati Hesniati

Abstract

This study explores the influence of corporate social responsibility (CSR) and green innovation on corporate financial performance. Using purposive sampling, the research examines a sample of 126 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022. Data were collected from the sample companies’ annual reports. Employing regression analysis to analyze the data, this study finds that CSR and green innovation positively affect financial performance. Companies that actively engage in CSR initiatives are more likely to implement environmentally friendly innovations. This study also found that green innovation mediates the relationship between CSR and financial performance. Consequently, prioritizing CSR fosters green innovation, which, in turn, improves financial performance through increased efficiency, corporate reputation, and market opportunities. This study provides valuable insights for managers and practitioners, highlighting the strategic role of CSR in strengthening financial performance through green innovation.

Keywords

Corporate social responsibility; firm performance; green innovation; manufacturing companies

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References

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DOI: https://doi.org/10.24815/jdab.v12i1.39531

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Accounting Department collaborated with IAI KAPd (Institute of Indonesia Chartered Accountant)
Faculty of Business and Economics
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
ISSN: 2355-9462, E-ISSN: 2528-1143

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