Corporate Social Responsibility Disclosure and Corporate Values: the moderation effect of Profitability

Abstract

Objective: This research aimed to examine whether corporate social responsibility disclosure affects corporate values by using profitability as a moderating variable, and to examine the aspects of CSR disclosure that were most widely disclosed by companies. The CSR index measurement used 91 items which were divided into 3 categories, namely economic, environmental, and social categories. Methods: The regression test used in this research was multiple linear regression using Moderated Regression Analysis (MRA) to determine the effect of CSR disclosure on corporate values, with profitability as the moderating variable. Originality: The originality of this research was to identify the CSR categories that were mostly disclosed by companies in Indonesia, and to identify whether CSR disclosure could increase company value, especially in developing countries where the fulfillment of disclosure obligations was still low. Results: The results of the analysis showed that the disclosure of Corporate Social Responsibility disclosure had no effect on corporate values, and profitability could be a moderating variable to increase the effect of CSR disclosure on corporate values. The most widely disclosed CSR category was the social category, and every year CSR disclosure has increased. Theoritical Contributions: This research used signal theory to explain the effect of CSR disclosure on corporate values. Social/management contributions: CSR disclosure had no affect on the value of the company because it was still not maximally fulfilling the obligation to disclose social responsibility, and the financial factor such as profit was still the focus of determining the value of the company which was a positive signal for investors.