Is Profitability and Foreign Ownership impact on Philanthropy Value?
Muhammad Yusuf myusuf_fe@unj.ac.id, Afidah Nur Aslamah afidah930@gmail.com, Haris Nur Hamid harisnhamid@gmail.com, Indah Muliasari indah_msari@unj.ac.id, Annisa Fitri Anugrah Sari annisaf.anugrah@gmail.com

State University of Jakarta

Abstract

This study was conducted to examine the effect of profitability and foreign ownership on the value of corporate philanthropy. This study uses panel data regression analysis to explain the research hypothesis. Based on predetermined criteria, researchers obtained 240 data from companies listed on the Indonesia Stock Exchange in 2016-2018. Then the data is analyzed using Eviews as the data processing software. The results of this study indicate that profitability has a significant positive effect on corporate philanthropy. This shows that in making decisions related to the value of corporate philanthropy, companies tend to pay attention to the resulting profitability. With increased profitability, the value of the philanthropic companies that are given also tends to increase, and vice versa. On the other hand, foreign ownership has not been proven to have a significant effect on corporate philanthropy. Generally in developing countries like Indonesia, there is a principle conflict between shareholders and company policy makers related to the value of philanthropy. Foreign ownership in companies in Indonesia is difficult to oversee corporate philanthropy because the information is not comprehensive given by management, especially companies that do not prioritize the value of corporate philanthropy.

Keywords: Foreign Ownership, Corporate Philanthropy Value, Profitability

Topic: Environmental Engineering