Does CSRD moderate the effect of financial performance on stock return? Evidence of Indonesian mining companies

Abstract

The purpose of this study is to examine the effect of financial performance on stock returns with corporate social responsibility disclosure as a moderating variable in mining companies listed on the Indonesia Stock Exchange (IDX) 2014-2016 period. This study used multiple linear regression to examine the corporate social responsibility disclosure in moderating the effect of financial performance on stock returns. The measurement of financial performance uses financial ratios, namely return on equity. The test results showed that partial return on equity had a positive and significant effect on stock returns. Furthermore, corporate social responsibility disclosure strengthens the effect of return on equity on stock returns. The implication of this research is for potential investors who want to invest in stocks should consider more disclosure of corporate social responsibility, because disclosure of corporate social responsibility is proven to be able to strengthen the effect of return on equity on increasing stock returns.

Composition of Commissioners and Directors, Profitability, Capital Structure and Investor Investment Decisions: Role of Sustainable Investment

“…Quality companies with good financial performance will certainly have value that continues to grow in the eyes of investors, thereby increasing the company's stock price [4,10]. This result is in line with research by [20,38] which found that investor decisions are influenced positively and significantly by profitability.…”

“…Then there is research that found that investor decisions on investment are also influenced by capital structure [2,3,42]. However, in the research of [16] as well as [20] no effect of capital structure was found on investor investment decision.…”

“…Research by [20,38] find that investor decisions are influenced positively and significantly by profitability. The higher the level of profitability of the company, the greater the level of prosperity provided by the company will attract investors to own the company.…”

Pemenuhan Tanggungjawab Ekonomik-Sosio-Ekologi:benarkah Memicu Keberlanjutan Kinerja Keuangan?

“…Kinerja keuangan perusahaan, khususnya laba yang dilaporkan, bukanlah variabel yang berdiri sendiri untuk memengaruhi keputusan investor, karena dari sejumlah penelitian ditunjukkan bukti bahwa respon investor pada kinerja keuangan menjadi makin besar ketika perusahaan memiliki kepedulian tinggi pada masalah sosial dan masalah lingkungan hidup; sebaliknya, respon investor melemah apabila perusahaan menunjukkan kepedulian rendah pada masalah sosial dan masalah lingkungan hidup (Riduwan dan Andayani, 2019;Hapsoro dan Husain, 2019;Kim et al, 2018). Hasilhasil penelitian tersebut dapat digunakan sebagai penjelas bahwa investor memiliki kesadaran dan keyakinan bahwa kinerja keuangan, yang akan mewujud sebagai kembalian investasi (return), bukanlah tujuan sesaat, tetapi harus berkelanjutan dalam jangka panjang.…”

Impact Financial Performance to Stock Prices: Evidence From Indonesia

“…The share price is the price that occurs at some point possible due to the supply and demand among the buyer and the seller of the stock. Certain circumstances and situations that can change stocks include the company's policy on expansion including micro and macroeconomic conditions, such as opening agencies, branches both at home and abroad; a sudden change in the position of manager or commissioner of the company involved in criminal acts and cases (Hapsoro & Husain, 2019;Haris et al, 2019;Le et al, 2020;Sharma et al, 2020).…”