Title: The role of satisfaction and profitability on CSR-firm value relationship: evidence from Indonesian Customer Satisfaction Award (ICSA)

Authors: Josua Tarigan; Mikhael Eliezer; Saarce Elsye Hatane

Addresses: Universitas Kristen Petra, Siwalankerto 121-131, Surabaya, Indonesia ' Universitas Kristen Petra, Siwalankerto 121-131, Surabaya, Indonesia ' Universitas Kristen Petra, Siwalankerto 121-131, Surabaya, Indonesia

Abstract: This paper adopts customer satisfaction as the mediating variable to find the indirect effects of corporate social responsibility (CSR) toward firm profitability and value. Partial least squares (PLS) analysis is conducted to assess 144 firm-year observations from Indonesian listed firms that consistently received Indonesian Customer Satisfaction Award (ICSA). The empirical findings clarify that CSR holds a prominent part in driving customers' satisfaction levels and the firm's financial performance. Accordingly, the firm should consider CSR engagement into its corporate strategy to achieve customer satisfaction and improve the short-term and long-term financial aspects. This finding could be a deliberation for managers in CSR investment as it does positively impact the firm. This paper provides the new and first evidence in adopting customer satisfaction based on ICSA to assess the Indonesian context's CSR and financial performance relationship.

Keywords: corporate social responsibility; CSR; customer satisfaction; Indonesian Customer Satisfaction Award; ICSA; profitability; firm value.

DOI: 10.1504/IJSSOC.2021.10041365

International Journal of Sustainable Society, 2021 Vol.13 No.3, pp.226 - 249

Received: 28 Jun 2020
Accepted: 28 Mar 2021

Published online: 08 Oct 2021 *

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