The Effect of Slack Resources on Strategic Corporate Social Responsibility (CSR): Empirical Evidence on Indonesian Listed Companies

Abstract

Objective – This study examines the effect of companies’ slack resources on strategic Corporate Social Responsibility (‘CSR’) and also non-strategic CSR. By analysing the slack resources as a determinant of CSR, it might indicate the companies’ priority regarding their strategic CSR as part of companies’ strategy.

Methodology/Technique – Instead of using profitability as a measure of slack resources, this study employs slack resources as a variable itself as it was developed by Burgeois (1981), based on financial data in the companies’ financial statements.

Findings – The empirical result of this study indicates that un-absorbed slack resources positively affect the strategic CSR and also non-strategic CSR of a company, while absorbed slack resources do not significantly affect either.

Novelty – Unlike previous studies, this study does not use profitability as a proxy of slack resources, but uses slack resources as a variable itself.