The objective of this study is to address the issue of the relationship between
corporate social and financial performance by moderating company size and
financial leverage.with the use of type of industry as control variable. The
Corporate social performance (CSP/CSR) is measured using seven item
developed initially by Michael Jantzi Research Associate, Inc and used by
Mahoney and Robert (2007). To attaint main research objective, the measure
of CSP composite is used. Furthermore, company size, financial leverage,
and type ofindustry are measured by total asset, degree of intermal and
external source to finance the company’s assets, and dummy variable (0 for
non manufacture and 1 for manufacture), respectively. A moderated multiple
regression model is used in the present study. Four models are developed in
the study basedon the theory of slack resiurce and good management. The
result of the present study is that corporate social performance (CSP/CSR)
has no effect on corporate financial performance (CFP) under slack resource
and good management theory it is also shown that only financial leverage
could moderate the interaction between CSP/CSR and financial performance
(CSP). However, based on the overall analysis, it may be reasonable to
come to conclusion that the relationship between CSP and financial
performance is spurious as Orlitzki (2000) concluded.
Key Words: Corporate social performance, corporate social responsibility,
financial performance, good management theory, stakeholder, and slack
resource theory
