THE ROLE OF CORPORATE SOCIAL RESPONSIBILITY, INTELLECTUAL CAPITAL, AND EARNINGS MANAGEMENT IN SHAPING FINANCIAL PERFORMANCE: EVIDENCE FROM INDONESIAN CONSUMER NON-CYCLICALS FIRMS

Abstract

This research aims to explore how Corporate Social Responsibility, Intellectual Capital, and Earnings Management influence the financial performance of companies in the non-cyclical consumer sector  that are listed on the Indonesia Stock Exchange from 2020 to 2024. Using a quantitative approach and panel data regression analysis, this study analyzes secondary data that has been selected through purposive sampling, emphasizing the completeness of financial reports and sustainability. Financial performance is measured by Return on Assets, CSR is evaluated through a disclosure index aligned with the Global Reporting Initiative (GRI), IC is assessed using the Value Added Intellectual Coefficient (VAIC), and EM is represented by discretionary accruals. The results indicate that Intellectual Capital has a positive and significant effect, while CSR and Earnings Management do not appear to influence financial performance. These findings highlight that the benefits derived from knowledge and the management of intangible assets are primary drivers of improved financial performance, surpassing the impact of social responsibility initiatives and earnings management, which predominantly focus on short-term results. This study contributes strategically to the understanding of the importance of transitioning to a knowledge-based economy in enhancing corporate competitiveness.