The influence of CSR and CEO narcissism on financial performance with earning management as mediation

Abstract

The purpose of the study was to look into how CEO narcissism and corporate social responsibility (CSR) affected financial success within the manufacturing industry listed on the Indonesia Stock Exchange (IDX) between 2017 and 2021. Employing a quantitative approach, the research adopted a causal design to provide insights into the importance of CSR and CEO narcissism in influencing financial performance. Sampling 193 manufacturing companies listed on the IDX through purposive sampling, the study utilized secondary data consisting of annual reports and sustainability reports sourced from the IDX website and respective company portals. Employing panel data regression analysis with the fixed effect method in E-views version 12, the study's findings revealed a significant influence of CSR on financial performance. However, CEO narcissism demonstrated an insignificant effect on financial performance. Moreover, the analysis indicated that earnings management did not mediate the link between financial performance, CEO narcissism, and CSR. By shedding light on the study advances knowledge of the variables influencing company performance by examining the relationship between CSR, CEO narcissism, and financial performance within the manufacturing sector in Indonesia. These findings hold implications for corporate decision-makers, policymakers, and stakeholders in fostering sustainable business practices and effective leadership strategies. Additionally, the study underscores the importance of further research to explore nuanced interactions among CSR, CEO characteristics, and financial outcomes for comprehensive insights into corporate behavior and performance.