The Influence of Corporate Governance, Corporate Social Responsibility, Firm Size on Firm Value: Financial Performance as Mediation Variable

Abstract

This study aims to examine and analyze the effect of directly or indirectly between the variables of corporate governance, corporate social responsibility, firm size, the financial performance of the company with the sample value amounted to 53 companies engaged in the manufacturing sector with years of observations from 2015 to 2017. Methods of data analysis using path analysis with AMOS software 24. Corporate governance is proxied by the Corporate Governance Index (CGI), corporate social responsibility is proxied by the Corporate Social Responsibility Index (CSRI), firm size is proxied by Size, financial performance proxied by Return on Assets (ROA), and the value of the company is proxied by Tobin's Q. The results showed that the direct effect of the test results show that 1) corporate social responsibility, firm size effect on financial performance. 2) Corporate social responsibility, firm size, financial performance affects the value of the company 3) corporate governance does not affect the company's financial performance and value. As for the indirect effect of the test showed that corporate governance, corporate social responsibility, firm size, to the value of the company through the financial performance of no significant impact. Therefore, the three did not mediate financial performance affects the value of the company 3) corporate governance does not affect the company's financial performance and value. As for the indirect effect of the test showed that corporate governance, corporate social responsibility, firm size, to the value of the company through the financial performance of no significant impact. Therefore, the three did not mediate financial performance affects the value of the company 3) corporate governance does not affect the company's financial performance and value. As for the indirect effect of the test showed that corporate governance, corporate social responsibility, firm size, to the value of the company through the financial performance of no significant impact. Therefore, the three did not mediate.

Corporate Social Responsibility disclosure and Indonesian firm value: The moderating effect of profitability and firm’s size

“…The findings of this study strengthen the studies conducted by Servaes and Tamayo (2013);Astuti et al (2018); Laili et al (2019); Amato and Falivena (2019); Seok et al (2019); Kamaliah (2020); Hendratama and Huang (2021) which concluded that CSR disclosure promotes better firm value, indicating that the more social disclosure items and the better the quality of the disclosure, the greater the firms' value.…”

“…Furthermore, Naseem et al (2017) uncovered causality between CSR disclosure and company performance in China. With respect to Indonesia, Laili et. al (2019) and Kamaliah (2020) found that CSR disclosure positively influences the value of Indonesian manufacturing sectors.…”

The Effect of Ownership Structure and Corporate Social Responsibility on Financial Performance and Firm Value in Mining Sector Companies in Indonesian

“…This two-way relationship in CSR and financial performance has proven to be positive. This is also confirmed by research conducted by Arsoy et al (2012), Hafez (2016), Ilmi et al(2017), Jallo andMus (2017), Firdaus et al, (2018), Maqbool and Zameer (2018), Laili et al (2019), Javeed and Lefen (2019) and Cho et al (2019) where they show that CSR activities carried out by companies have a positive impact on improving financial performance. The results of research conducted by Chetty et al (2015), Madorran and Garcia (2016), and Mansaray et al (2017) meanwhile prove otherwise, where CSR does not affect company performance.…”

Does Corporate Governance Influence Value Creation : Assessing the Mediating Role of CSR and Tax Avoidance

“…In an agency relationship, there is a contract where a principal employs an agent to perform duties under their names, including delegating authority in decision-making (Jensen & Meckling, 1976). With the authority given to the agent, they are expected to make the best decision for the interest of the principal (Laili et al, 2019). However, the interests of the principal and the agent are often in conflict with each other, leading to the agency problem (Haryanti, 2019).…”

“…This is in line with the study done by Ammann et al, (2011), Javaid (2015 & Owusu & Weir (2016) which shows that good governance has a positive impact on value creation, which means that a company that is able to implement good corporate governance are more likely to have higher company value. However, in a study conducted by Laili et al, (2019), it is found that corporate governance has no significant impact on financial performance and company value.…”