ABSTRACT
Keywords: Corporate social responsibility, Total payout, Cash dividend, Share repurchase, Machinery and equipment industry.
Machinery and equipment industry is one of the key industries in world economy as it is crucial industry for the export and import of many countries. This industry is providing to other manufacturing sectors; IT technology, engineering, and automotive sectors. However, its operating activities cause detrimental consequences to both social and environment.
The firm strategy to alleviate the ethical concerned is by involving in Corporate Social Responsibility (CSR). Investing in CSR activities improve firm reputation, firm performance, and relationship among the stakeholders, nevertheless it brings the agency problem issued to the equity investors of the use of firm financial resource. Hence, payout policy could be one channel for company to mitigate the agency problem.
This study we desire to examine the connection between firm CSR performance; total score, social, and environmental score in machinery and equipment industry. The outcomes reveal the positive significant of CSR performance and firm payout. Furthermore, machinery and equipment firms invest in social score is stronger influence to the firm payout policy than environmental performance.

REFERENCES
Amor-Esteban, V., Galindo-Villardón, M.-P., García-Sánchez, I.-M., & David, F. (2019). An extension of the industrial corporate social responsibility practices index: New information for stakeholder engagement under a multivariate approach. Corporate Social Responsibility and Environmental Management, 26(1), 127-140.
Benlemlih, M. (2019). Corporate social responsibility and dividend policy. Research in International Business and Finance, 47(0), 114-138.
Berzins, J., Bøhren, Ø., & Stacescu, B. (2019). Dividends and taxes: The moderating role of agency conflicts. Journal of Corporate Finance, 58(0), 583-604.
Bøhren, Ø., Josefsen, M. G., & Steen, P. E. (2012). Stakeholder conflicts and dividend policy. Journal of Banking & Finance, 36(10), 2852-2864.
Borghesi, R., Houston, J. F., & Naranjo, A. (2014). Corporate socially responsible investments: CEO altruism, reputation, and shareholder interests. Journal of Corporate Finance, 26(0), 164-181.
Bouslah, K., Liñares-Zegarra, J., M'Zali, B., & Scholtens, B. (2018). CEO risk-taking incentives and socially irresponsible activities. The British Accounting Review, 50(1), 76-92.
Breuer, W., Müller, T., Rosenbach, D., & Salzmann, A. (2018). Corporate social responsibility, investor protection, and cost of equity: A cross-country comparison. Journal of Banking & Finance, 96(0), 34-55.
Brockman, P., & Unlu, E. (2011). Earned/contributed capital, dividend policy, and disclosure quality: An international study. Journal of Banking & Finance, 35(7), 1610-1625.
Cai, Y., Jo, H., & Pan, C. (2012). Doing well while doing bad? CSR in controversial industry sectors. Journal of Business Ethics, 108(4), 467-480.
Chen, Y.-C., Hung, M., & Wang, Y. (2018). The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China. Journal of Accounting and Economics, 65(1), 169-190.
Cheung, A., Hu, M., & Schwiebert, J. (2018). Corporate social responsibility and dividend policy. Accounting & Finance, 58(3), 787-816.
Cui, J., Jo, H., & Na, H. (2018). Does corporate social responsibility affect information asymmetry? Journal of Business Ethics, 148(3), 549-572.
Eichberger, J., Grant, S., & King, S. P. (1999). On relative performance contracts and fund manager's incentives. European Economic Review, 43(1), 135-161.
El Ghoul, S., Guedhami, O., Kwok, C. C. Y., & Mishra, D. R. (2011). Does corporate social responsibility affect the cost of capital? Journal of Banking & Finance, 35(9), 2388-2406.
Fatemi, A., Glaum, M., & Kaiser, S. (2018). ESG performance and firm value: The moderating role of disclosure. Global Finance Journal, 38(0), 45-64.
Freeman, R., & McVea, J. (1984). A stakeholder approach to strategic management. SSRN Electronic Journal(0), 189-207.
Friedman, M. (1970). A Theoretical Framework for Monetary Analysis. Journal of Political Economy, 78(2), 193-238.
Gangi, F., Meles, A., Monferrà, S., & Mustilli, M. (2020). Does corporate social responsibility help the survivorship of SMEs and large firms? Global Finance Journal, 43(0).
Gloßner, S. (2019). Investor horizons, long-term blockholders, and corporate social responsibility. Journal of Banking & Finance, 103(0), 78-97.
Greening, D., & Turban, D. (2000). Corporate social performance as a competitive advantage in attracting a quality workforce. Business & Society - BUS SOC, 39(0), 254-280.
Hull, T. J. (2015). How the timing of dividend reductions can signal value. Journal of Corporate Finance, 30(0), 114-131.
Jensen, M. C. (2001). Value maximization, stakeholder theory, and the corporate objective function. Journal of Applied Corporate Finance, 14(3), 8-21.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
Jiang, F., Cai, X., Jiang, Z., & Nofsinger, J. R. (2019). Multiple large shareholders and dividends: Evidence from China. Pacific-Basin Finance Journal, 57(0).
Kalay, A., & Lemmon, M. (2008). Payout Policy Handbook of Empirical Corporate Finance (pp. 3-57).
Kao, E. H., Yeh, C.-C., Wang, L.-H., & Fung, H.-G. (2018). The relationship between CSR and performance: Evidence in China. Pacific-Basin Finance Journal, 51(0), 155-170.
Karpavičius, S. (2014). Dividends: Relevance, rigidity, and signaling. Journal of Corporate Finance, 25(0), 289-312.
La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (2000). Agency problems and dividend policies around the world. The Journal of Finance, 55(1), 1-33.
Landon, S., & Smith, C. E. (2007). The exchange rate and machinery and equipment imports: Identifying the impact of import source and export destination country currency valuation changes. The North American Journal of Economics and Finance, 18(1), 3-21.
Moravcikova, K., Stefanikova, Ľ., & Rypakova, M. (2015). CSR reporting as an important tool of CSR communication. Procedia Economics and Finance, 26(0), 332-338.
Muttakin, M. B., Khan, A., & Azim, M. I. (2015). Corporate social responsibility disclosures and earnings quality. Managerial Auditing Journal, 30(3), 277-298.
Noronha, G. M., Shome, D. K., & Morgan, G. E. (1996). The monitoring rationale for dividends and the interaction of capital structure and dividend decisions. Journal of Banking & Finance, 20(3), 439-454.
Plotnikov, V., & Vertakova, J. (2014). Manufacturing industry in Russia: Problems, status, prospects. Procedia Economics and Finance, 14(0), 499-506.
Radhakrishnan, M. S., Chitrao, P., & Nagendra, A. (2014). Corporate social responsibility (CSR) in market driven environment. Procedia Economics and Finance, 11(0), 68-75.
Rozeff, M. S. (1982). Growth, beta and agency costs as determinant of dividend payout ratios. Journal of Financial Research, 5(3), 249-259.
Samet, M., & Jarboui, A. (2017). Corporate social responsibility and payout decisions. Managerial Finance, 43(9), 982-998.
Sheikh, S. (2019). Corporate social responsibility and firm leverage: The impact of market competition. Research in International Business and Finance, 48(0), 496-510.
Verwijmeren, P., & Derwall, J. (2010). Employee well-being, firm leverage, and bankruptcy risk. Journal of Banking & Finance, 34(5), 956-964.
Williams, J. (1988). Efficient signalling with dividends, investment, and stock repurchases. The Journal of Finance, 43(3), 737-747.
Yang, A. S., & Baasandorj, S. (2017). Exploring CSR and financial performance of full-service and low-cost air carriers. Finance Research Letters, 23(0), 291-299.
Ye, D., Deng, J., Liu, Y., Szewczyk, S. H., & Chen, X. (2019). Does board gender diversity increase dividend payouts? Analysis of global evidence. Journal of Corporate Finance, 58(0), 1-26.
Zhang, M., Tong, L., Su, J., & Cui, Z. (2015). Analyst coverage and corporate social performance: Evidence from China. Pacific-Basin Finance Journal, 32(0), 76-94.