The Impact of Good Corporate Governance on Firm Value with Corporate Social Responsibility as Mediating Variable: Empirical Study in Publicly Listed Mining Companies in the Indonesia Stock Exchange (IDX) bambang tjahjadi, noorlailie soewarno, herly vitus
universitas airlangga
Abstract
Despite numerous studies on the influence of good corporate governance on firm value, reports have not yet shown consistent results. This reason justifies that studies on other factors involved in the relationship between corporate governance and firm value are still needed, especially studies on a specific industry having unique characteristics. This study examines whether corporate social responsibility mediates the influence of good corporate governance on firm value. The mining industry is selected with the consideration that the industry has a major impact on sustainable development and is experiencing a declining trend in performance within the last five years. Using purposive sampling technique, 35 mining companies were selected from the Indonesia Stock Exchange (IDX) for the period of 2013-2015 and resulted 105 observed data. The results indicate the following. Firstly, good corporate governance has a significant effect on firn value. Secondly, good corporate governance has a significant effect on corporate social responsibility. Thirdly, corporate social responsibility does not affect firm value. Lastly, corporate social responsibility does not mediate the influence of corporate governance on firm value. This study contributes to the agency theory and the signaling theory in term of providing empirical evidence on the mining industry in Indonesia.
Keywords: good corporate governance, firm value, corporate social responsibility, mining companies
