Disclosing Corporate Social Responsibility Affects Company Value: Profitability as Moderating Variable
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Apr 30, 2024
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The goal of this research is to determine how company value is impacted by corporate social responsibility (CSR) and how profitability, as determined by the rate of return on assets (ROA), modifies this impact. The main reason is that businesses which can disclose their CSR will garner greater public attention. Purposive sampling was employed in this study, consisting of all businesses listed on the Indonesia Stock Exchange (IDX) during 2018 to 2022. Because relatively few organizations are prepared to participate in CSR due to the significant expenditures involved, the paper’s findings show that CSR Disclosure does not significantly affect company value. The second finding stated that profitability as defined by return on assets (ROAt) can enhance the interaction among CSR disclosure and company value because profitable businesses can afford to make larger investment in CSR, which can best serve stakeholders who are essential to the business’s longevity.
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References
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Sugiyono. (2019). Metodelogi Penelitian Kuantitatif dan Kualitatif Dan R&D. ALFABETA.
Tenriwaru, & Nasaruddin, F. (2020). Pengaruh Pengungkapan Corporate Social Responsibility Terhadap Nilai Perusahaan Dengan Profitabilitas Sebagai Variabel Moderasi. AJAR Atma Jaya Accounting Research, 3(1), 68–87. https://doi.org/10.35129/ajar.v3i01.104
Cherian, J., Umar, M., Thu, P. A., Nguyen-Trang, T., Sial, M. S., & Khuong, N. V. (2019). Does Corporate Social Responsibility Affect the Financial Performance of The Manufacturing Sector? Evidence From an Emerging Economy. Sustainability (Switzerland), 11(4), 1–14. https://doi.org/10.3390/su11041182
Deegan, C. M. (2019). Legitimacy Theory: Despite Its Enduring Popularity and Contribution, Time Is Right For A Necessary Makeover. Accounting, Auditing and Accountability Journal, 32(8), 2307–2329. https://doi.org/10.1108/AAAJ-08-2018-3638
Dewi, P. P. R. A., Sudana, I. P., Badera, I. D. N., & Rasmini, I. K. (2021). The Effect of CSR Disclosure on Firm Value with Profitability and Leverage as Moderators. Indonesian Journal of Sustainability Accounting and Management, 5(1), 113–122. https://doi.org/10.28992/ijsam.v5i1.325
Gillan, S. L., Koch, A., & Starks, L. T. (2021). Firms and Social Responsibility: A Review of ESG and CSR Research In Corporate Finance. Journal of Corporate Finance, 66, 101889. https://doi.org/https://doi.org/10.1016/j.jcorpfin.2021.101889
Handayati, P., Sumarsono, H., & Narmaditya, B. S. (2022). Corporate Social Responsibility Disclosure and Indonesian Firm Value: The Moderating Effect of Profitability and Firm’s Size. Journal of Eastern European and Central Asian Research, 9(4), 703–714. https://doi.org/10.15549/jeecar.v9i4.940
Hendriani, L., & Tjahjono, G. (2018). Indonesia’s Best Practices of Corporate Social Initiative. PT Swasembada Media Bisnis.
Hourneaux, F., Gabriel, M. L. da S., & Gallardo-Vázquez, D. A. (2018). Triple Bottom Line and Sustainable Performance Measurement in Industrial Companies. Revista de Gestao, 25(4), 413–429. https://doi.org/10.1108/REGE-04-2018-0065
Kamaliah. (2020). Disclosure of Corporate Social Responsibility (CSR) and Its Implications on Company Value as A Result Of The Impact Of Corporate Governance And Profitability. International Journal of Law and Management, 62(4), 339–354. https://doi.org/10.1108/IJLMA-08-2017-0197
Kaur, N., & Singh, V. (2020). Empirically Examining the Impact of Corporate Social Responsibility On Financial Performance: Evidence From Indian Steel Industry. Asian Journal of Accounting Research, 6(2), 134–151. https://doi.org/10.1108/AJAR-07-2020-0061
Kotler, P., & Lee, N. R. (2005). Corporate Social Responsibility: Doing The Most Good For Your Company And Your Cause. In Wiley. Willey.
Laras, D. M. (2020). Pengaruh Kinerja Keuangan dan Corporate Social Responsibility terhadap Nilai Perusahaan Terdaftar di BEI. In Publikasi Ilmiah. http://eprints.ums.ac.id/id/eprint/82006
Maryana, M., & Carolina, Y. (2021). The Impact of Firm Size, Leverage, Firm Age, Media Visibility and Profitability on Sustainability Report Disclosure. Jurnal Keuangan Dan Perbankan, 25(1), 34–47. https://doi.org/10.26905/jkdp.v25i1.4941
Ningrum, E. P. (2022). Nilai Perusahaan (Konsep dan Aplikasi). Penerbit Adab.
Noor, A., Lahaya, I. A., Kurniawan, I. S., Najat, S., & Hafidz, S. A. (2021). CSR Disclosures: Role and Relationship to Accounting Conservatism in Improving Earnings of Quality. Jurnal Keuangan Dan Perbankan, 25(3), 585–598. https://doi.org/10.26905/jkdp.v25i3.5030
Nur, T. (2021, May 19). The Impact of Sustainability Practices on Stock Return: The Relationship Between Firm Value, CSR Disclosure, Firm Size and Profitability Evidence from Indonesia Publics Firms Listed on (SRI)-KEHATI Index. https://doi.org/10.4108/eai.14-9-2020.2304483
Nurjanah, I., Kunci, K., Csr, :, Perusahaan, K., Keuangan, R., & Perusahaan, N. (2023). How Does Corporate Social Responsibility Disclosure Affect Firm Value: Firm Maturity and Firm Financial Risk Context. The Indonesian Journal of Accounting Research, 26(3), 393–424. https://doi.org/10.33312/ijar.716
Peraturan Pemerintah No. 47 Tahun 2012. (n.d.). Peraturan Pemerintah Republik Indonesia Tentang Tanggung Jawab Sosial Dan Lingkungan Perseroan Terbatas. https://peraturan.bpk.go.id/Details/5260/pp-no-47-tahun-2012
Pinaria, P. (2023, September 30). Mayora Raih The Most Prominent Consumer Goods Company in Indonesia di Ajang Prominent Award 2023. Medcom.id.
Purbawangsa, I. B. A., Solimun, S., Fernandes, A. A. R., & Mangesti Rahayu, S. (2020). Corporate Governance, Corporate Profitability Toward Corporate Social Responsibility Disclosure and Corporate Value (Comparative Study In Indonesia, China And India Stock Exchange In 2013-2016). Social Responsibility Journal, 16(7), 983–999. https://doi.org/10.1108/SRJ-08-2017-0160
Rasyid, C. A. M. P., Indriani, E., & Hudaya, R. (2022). Pengaruh Corporate Social Responsibility Dan Struktur Modal Terhadap Nilai Perusahaan Dengan Ukuran Perusahaan Dan Profitabilitas Sebagai Variabel Moderasi Pada Perusahaan Pertambangan. Jurnal Aplikasi Akuntansi, 7(1), 135–156. https://doi.org/10.29303/jaa.v7i1.146
Riyadh, H. A., Al-Shmam, M. A., & Firdaus, J. I. (2022). Corporate Social Responsibility and GCG Disclosure On Firm Value With Profitability. International Journal of Professional Business Review, 7(3), 1–21. https://doi.org/10.26668/businessreview/2022.v7i3.e655
Romana, S. (2017). Pengaruh Corporate Social Responsibility Terhadap Nilai Perusahaan Dengan Profitabilitas Sebagai Variabel Moderating [Skripsi, Universitas Pasir Pangaraian]. http://repository.upp.ac.id/452/1/Tabel%201%20Suci%20Ramona.pdf
Sugiyono. (2019). Metodelogi Penelitian Kuantitatif dan Kualitatif Dan R&D. ALFABETA.
Tenriwaru, & Nasaruddin, F. (2020). Pengaruh Pengungkapan Corporate Social Responsibility Terhadap Nilai Perusahaan Dengan Profitabilitas Sebagai Variabel Moderasi. AJAR Atma Jaya Accounting Research, 3(1), 68–87. https://doi.org/10.35129/ajar.v3i01.104