CSR terhadap Financial Distress di Indonesia dan Malaysia Analisis Komparatif Antara Negara Dengan Peraturan CSR yang Berbeda

This research aims to examine the relationship between corporate social responsibility (CSR) and financial distress for listed companies in the Indonesian Stock Exchange (IDX) and Bursa Malaysia (KLSE), where the researcher based its
stance on the stakeholder theory. Further, a comparative analysis will be conducted to analyze the impact of CSR regulations in each country towards the CSR-distress relationship. This study uses secondary data from Capital IQ
database, sample firm’s annual and sustainability reports. Methodologies applied in this research are linear multiple regression, with the first hypothesis tested using the two-stage least squares (2SLS), the second hypothesis using fixed effect regression, with the help of instrumental and interaction terms as moderating variables in both hypothesis testings. This study has found a positive significant
relationship between CSR to Altman Z-score for combined Indonesian and Malaysian firms, especially in the social dimension. Results were similar when Malaysian firms (CSR Non-Regulated) were tested individually, while insignificant
CSR-distress relationships were found for Indonesian firms (CSR Regulated). Limitations of this study include limited availability of data, as well as subjective judgment in CSR expense classification. Future researchers may want to create a similar study while taking into account the long-term effect of CSR or event study relating to the Covid-19. Outcome obtained from this research can be beneficial towards policy makers, managers, investors and creditors in making a more
informed CSR related decision.