Impact of Stakeholder Orientation on Public Finance Regulatory Compliance in Indonesia: Mediating Role of Ethical Climate and Deterrence Measures

Abstract

The following study analyzes the importance of stakeholder orientation on public financial regulatory compliance in Indonesia, in mediating the role of ethical climate and deterrence measures. The study has a primary objective to identify the role of stakeholder orientation on financial regulatory compliance. The complete paper consists of different sections including introduction, literature study, methodology, theoretical framework, results, and conclusion. Previous studies identify the relationship between stakeholder orientation and financial regulatory compliance while this research demonstrates that stakeholder orientation plays an important role in order to develop an ethical climate under financial regulatory compliance. The data has been collected from managers and managerial level employees through purposive sampling technique. The total sample size for analysis was 301 respondents including males and females. The data has been collected through a survey-based questionnaire. Furthermore, the data was analyzed through SPSS and AMOS and different tests have been used to obtain reliable results as presented in this paper’s analysis section. The results of the analysis show that all hypotheses are accepted and that stakeholder orientation has significant impact on financial regulatory compliance. Moreover, ethical climate and deterrence measures also have a significant mediating role in the relationship between financial compliance and stakeholder orientation.