VALUE OF THE COMPANY : THE MEDIATING RETURN ON EQUITY

Indra Pramana Raharja

doi:10.37641/riset.v6i2.2135

Indra Pramana Raharja Institute of Business and Informatics Kesatuan

DOI: https://doi.org/10.37641/riset.v6i2.2135

Keywords: Corporate Social Responsibility, Islamic Social Responsibility, Institutional Ownership, Company Value

Abstract

The grand theory in this research was built by combining Signal Theory, Stakeholder Theory, and Agency Theory as a conceptual basis for hypothesis development. Signal Theory highlights how information companies convey, such as implementing Good Corporate Governance (GCG), can influence investor confidence and investment decisions. This study aims to analyze the impact of CSR and GCG on company value (Tobin's Q), mediated by financial performance, with a focus on Islamic Social Responsibility (ISR), Independent Board of Commissioners (IBC), and Institutional Ownership (IO). They are using a quantitative method. The data is derived from the annual financial reports of 39 banking companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. The purposive sampling technique was chosen to ensure that the sample used was relevant and could provide valid data to test the relationship between the variables studied and answer the research hypothesis comprehensively. Secondary data was collected from www.idx.co.id, and path analysis was employed as the analytical method. The findings reveal that CSR, ISR, IBC, and IO positively and directly influence company value (Tobin's Q). These results underscore the critical role of CSR and GCG in shaping a company's financial performance and market value.

Downloads

Download data is not yet available.

References

Bimasakti, Y. K., & Warastuti, Y. (2024). The Effect of Corporate Governance and Intellectual Capital on The Financial Performance of Banking Companies Listed on The Indonesia Stock Exchange in 2016-2022. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 8(1), 601–631. https://doi.org/10.31955/mea.v8i1.3733

Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management (14th ed.). Salemba Empat.

Faiqoh, S., & Mauludy, M. I. A. (2019). Implementation of GRI-G4 as a Standard Guidline for Sustainability Reporting Systems for Companies in Indonesia. Jurnal Akuntansi Universitas Jember, 16(2). https://doi.org/10.19184/jauj.v16i2.7260

Fatoni, H. A., & Sulhan, M. (2020). The Influence of Good Corporate Governance on Company Value with Profitability as a Mediating Variable (Study on State-Owned Enterprises Listed on The Indonesia Stock Exchange for The 2016-2018 Period). Ekspansi: Jurnal Ekonomi, Keuangan, Perbankan Dan Akuntansi, 12(1), 77–94. https://doi.org/10.35313/ekspansi.v12i1.1888

Febrianti, K., & Dewi, N. H. U. (2019). The Effect of Corporate Governance on Company Value (Empirical Study of LQ 45 Companies Listed on The Indonesia Stock Exchange Period 2015-2017). The Indonesian Accounting Review, 9(2), 155–168. https://doi.org/10.14414/tiar.v9i2.1769

Fionasari, D., Savitri, E., & Andreas, A. (2017). The Influence of Corporate Social Responsibility Disclosure on Tax Aggressiveness (Study on Companies Listed on The Indonesia Stock Exchange). SOROT, 12(2), 95–105. https://doi.org/10.31258/sorot.12.2.4557

Gangi, F., & D’Angelo, E. (2016). The Virtuous Circle of Corporate Social Performance and Corporate Social Disclosure. Modern Economy, 7(12), 1396–1418. https://doi.org/10.4236/me.2016.712129

Himawan, H. M. (2020). The Influence of Profitability, Company Size, and Leverage on Company Value in Property and Real Estate Companies Going Public on The Indonesia Stock Exchange for The 2016-2018 Period. Jurnal Ilmiah Mahasiswa FEB, 9(1), 1–35. https://jimfeb.ub.ac.id/index.php/jimfeb/article/view/6907

Indika, M. (2015). The Influence of Ownership Structure and Leverage on Corporate Social Responsibility Disclosure in Manufacturing Companies Listed on The Indonesia Stock Exchange. Jurnal Fordema, 12(1), 103–120. https://jurnal.um-palembang.ac.id/fordema/article/view/296

International Finance Corporation. (2018). The Indonesia Corporate Governance Manual (2nd ed.). Jakarta: International Finance Corporation. https://www.ojk.go.id/Files/box/THE-INDONESIA-CORPORATE-GOVERNANCE-MANUAL-First-Edition.pdf#search=governance

Kasmir. (2019). Financial Statement Analysis (12ed ed.). Raja Grafindo Persada. https://inlislite.uin-suska.ac.id/opac/detail-opac?id=27283

Khasanah, I. D., & Sucipto, A. (2020). The Influence of Corporate Social Responsibility (CSR) and Good Corporate Governance (GCG) on Company Value with Profitability as an Intervening Variable. AKUNTABEL: Jurnal Akuntansi Dan Keuangan, 17(1), 14–28. http://repository.uin-malang.ac.id/5604/

Khoirudin, I., Haq, F. A., Wahit, A. N., Safitri, E. N., Nugroho, N. S. G., & Santoso, A. P. A. (2023). The Role of Business Ethics in Business Strategy Challenges at CV. Inti Motor. Jurnal Publikasi Sistem Informasi Dan Manajemen Bisnis, 3(1), 90–95. https://doi.org/10.55606/jupsim.v3i1.2364

Kuncorowati, P. F., Miqdad, M., & Roziq, A. (2021). The Influence of Profitability, Company Size, and Good Corporate Governance on Corporate Social Responsibility Disclosure and Its Impact on Abnormal Returns in LQ45 Companies. Jurnal Akuntansi Dan Pajak, 22(1), 78–94. https://doi.org/10.29040/jap.v22i1.1920

Lestari, A. D., & Zulaikha, Z. (2021). The Influence of Good Corporate Governance and Corporate Social Responsibility on Company Value (Empirical Study on Manufacturing Companies Listed on The Indonesia Stock Exchange in 2015-2019). Diponegoro Journal of Accounting, 10(4), 1–15. https://ejournal3.undip.ac.id/index.php/accounting/article/view/33003

Maryanti, E., & Fithri, W. N. (2017). Corporate Social Responsibility, Good Corporate Governance, Environmental Performance on Financial Performance and Its Influence on Company Value. Journal of Accounting Science, 1(1), 21–37. https://doi.org/10.21070/jas.v1i1.773

Maulina, R., & Iqramuddin. (2019). The Influence of Liquidity, Financial Leverage, Profitability on Islamic Social Reporting (ISR) Disclosure and Its Impact on Company Value in Islamic Commercial Banks in Indonesia. Jurnal AKBIS, 3(1), 57–72. http://jurnal.utu.ac.id/jakbis/article/view/1021/0

Narayana, I. P. L., & Wirakusuma, M. G. (2021). CSR Disclosure on Company Value with Profitability and Company Size as Moderating Variables. E-Jurnal Akuntansi, 31(4), 862–879. https://doi.org/10.24843/EJA.2021.v31.i04.p06

Nurastikha, N., & Ratnawati, K. (2020). The Influence of Good Corporate Governance Dimensions on Financial Performance (Study on Banking Companies Listed on The Indonesia Stock Exchange for The Period 2014 - 2018). Jurnal Ilmiah Mahasiswa FEB, 8(2), 1–18. https://jimfeb.ub.ac.id/index.php/jimfeb/article/view/6716

Nurulrahmatiah, N., Pratiwi, A., & Nurhayati. (2020). The Influence of Good Corporate Governance and Financial Performance on Stock Prices of Food and Beverage Companies Listed on The Indonesia Stock Exchange (IDX) in 2011-2018. Coopetition : Jurnal Ilmiah Manajemen, 11(2), 135–144. https://journal.ikopin.ac.id/index.php/coopetition/article/view/111

Pangeran, P., & Salaunaung, D. (2017). Governance Practices and Institutional Ownership: Empirical Evidence from The BAnking Industry Sector. Jurnal Akuntansi, 20(2), 216–237. https://doi.org/10.24912/ja.v20i2.55

Prabantama, H. P., & Parasetya, M. T. (2022). The Influence of Profitability and Corporate Governance on Company Value with Corporate Social Responsibility Disclosure as an Intervening Variable (Empirical Study on Primary Consumer Goods Sector Companies Listed on The Indonesia Stock Exchange in 2019-. Diponegoro Journal of Accounting, 11(4), 1–14. https://ejournal3.undip.ac.id/index.php/accounting/article/view/36383

Prasetyo, T., Yulianti, E. B., & Barus, M. (2024). Analysis of Risk Management Implementation on Bad Credit Risk in Consumer & Retail Products of PT. Regional Development Bank of West Java and Banten (Jakarta Special Branch Office) 2020-2022. Jurnal Riset Ekonomi Dan Akuntansi, 1(4), 354–374. https://doi.org/10.54066/jrea-itb.v1i4.1664

Puspitasari, E., & Ermayanti, D. (2019). The Influence of Corporate Social Responsibility on Company Value with Good Corporate Governance as a Moderating Variable (Empirical Study of State-Owned Public Banking Companies Listed on The IDX for The Period 2011-2018). SNEB : Seminar Nasional Ekonomi Dan Bisnis Dewantara, 1(1), 29–40. https://doi.org/10.26533/sneb.v1i1.409

Putra, R. D., & Afriyenti, M. (2021). The Influence of Good Corporate Governance Mechanism and Corporate Social Responsibility Disclosure on Stock Returns. Jurnal Eksplorasi Akuntansi, 3(2), 248–263. https://doi.org/10.24036/jea.v3i2.332

Rahmawati, N., Abbas, D. S., Hidayat, I., & Aulia, T. Z. (2022). The Influence of Dividend Policy, Independent Board of Commissioners, Corporate Social Responsibility, and Profitability on Company Value. Jurnal Mahasiswa Manajemen Dan Akuntansi, 1(2), 111–129. https://doi.org/10.30640/jumma45.v1i2.326

Sabrina, H. L. (2019). The Influence of Sustainability Reports on The Financial Performance of Banking Companies. Jurnal Paradigma Akuntansi, 1(2), 477–486. https://doi.org/10.24912/jpa.v1i2.5018

Sembiring, S., & Trisnawati, I. (2019). Factors Affecting Company Value. Jurnal Bisnis Dan Akuntansi, 21(1a-2), 173–184. https://jurnaltsm.id/index.php/JBA/article/view/754

Sibuea, A. Y., Nasution, A. A., & Hasyim, S. (2023). The Influence of Good Corporate Governance on Financial Performance with Earnings Management as a Mediating Variable in State-Owned Enterprises Listed on The Indonesia Stock Exchange. USU-IR.

Sitanggang, R. P., & Ratmono, D. (2019). The Influence of Corporate Governance and Corporate Social Responsibility Disclosure on Financial Performance with Management as a Mediating Variable. Diponegoro Journal of Accounting, 8(4), 1–15. https://ejournal3.undip.ac.id/index.php/accounting/article/view/25852

Suhadak, S., Kurniaty, K., Handayani, S. R., & Rahayu, S. M. (2019). Stock Return and Financial Performance as Moderation Variable in Influence of Good Corporate Governance towards Corporate Value. Asian Journal of Accounting Research, 4(1), 18–34. https://doi.org/10.1108/AJAR-07-2018-0021

Wardhani, D. K., & Isnalita. (2019). The Effect of Good Corporate Governance on Accounting Conservatism (Study on Banking Companies Listed on IDX 2013-2017). International Journal of Innovation, Creativity and Change, 9(8), 64–75. https://scholar.unair.ac.id/en/publications/the-effect-of-good-corporate-governance-on-accounting-conservatis

Widayawati, E., & Hardati, R. N. (2023). The Effect of Good Corporate Governance on Company Value with Financial Performance as a Mediating Variable. International Journal of Economics, Business and Accounting Research (IJEBAR), 7(2), 611–623. https://jurnal.stie-aas.ac.id/index.php/IJEBAR/article/view/9468

Wijaya, D. K., & Yasa, I. N. P. (2022). The Influence of Corporate Social Responsibility, Company Size, and Profitability on Company Value in Manufacturing Companies Listed on The Indonesia Stock Exchange for The 2019-2020 Period. JIMAT (Jurnal Ilmiah Mahasiswa Akuntansi) Undiksha, 13(4), 1186–1196. https://garuda.kemdikbud.go.id/documents/detail/3206336

Wyatt, A. (2006). An Accounting Perspective. In The Management of Intellectual Property. United Kingdom: Edward Elgar Publishing. https://doi.org/10.4337/9781847201553.00009

Yasah, A. D., Ajuj, S. S., Fardani, L. K. A., Hidayat, R., & Ikaningtyas, M. (2024). Stakeholder Engagement in Sustainable Business Planning and Development. Jurnal Media Akademik, 2(4), 1–17. https://jurnal.mediaakademik.com/index.php/jma/article/view/230