<![CDATA[Prior studies report inconsistent evidence on how Corporate Social Responsibility (CSR) relates to firm value and corporate tax avoidance, partly because most measures rely on disclosure-based CSR indices rather than the actual cost a company incurs for its CSR activities. This study examines the effect of CSR cost on firm value and investigates whether tax avoidance improvement, measured through the year-on-year change in the Cash Effective Tax Rate, mediates this relationship. The study uses panel data from 174 firm-year observations of LQ45-indexed companies listed on the Indonesia Stock Exchange during the 2020–2024 period, with CSR cost measured as the total monetary expenditure on CSR activities and firm value proxied by Tobin’s Q. The hypothesized relationships are tested using Structural Equation Modeling (SEM) with WarpPLS. The results show that CSR cost has a significant negative effect on firm value and a significant positive effect on tax avoidance improvement, while tax avoidance improvement itself has a significant negative effect on firm value. Because the direct effect of CSR cost on firm value remains statistically significant after-tax avoidance improvement is included in the model, the mediation is partial rather than full. These findings suggest that, within the Indonesian LQ45 sample, CSR expenditure may be associated with increased tax avoidance and a decline in firm value when it is not accompanied by transparent governance, although the archival design demonstrates statistical association rather than managerial intent. The study contributes a monetary-based approach to measuring CSR and offers implications for strengthening the transparency and accountability of CSR-related fiscal policy.]]>
