THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY AND OWNERSHIP STRUCTURE ON COMPANY VALUE WITH PROFITABILITY AS MODERATOR

Haji, Sapto
Herawati, Vinola

JAKPI
Vol 5, No 2 (2025)

This study examines the effects of corporate social responsibility (CSR) disclosure quality and ownership structure on company value among Indonesian listed firms, with profitability serving as a moderating variable. The research addresses inconsistent findings in prior literature regarding CSR-value and ownership-value relationships by investigating whether financial performance conditions the effectiveness of these mechanisms. The study employs panel regression analysis on an unbalanced panel dataset comprising 612 non-financial firms listed on the Indonesia Stock Exchange, yielding 1,732 firm-year observations during 2022–2024. CSR disclosure is measured using a granular 0-to-3 scoring system based on the Global Reporting Initiative framework. Two model specifications are estimated: pooled ordinary least squares with sector and year fixed effects, and firm fixed-effects models, both utilizing clustered robust standard errors. CSR disclosure quality significantly enhances company value across both model specifications. Ownership structure demonstrates a significant positive effect in cross-sectional analysis but becomes insignificant under firm fixed-effects estimation. Profitability directly increases firm value and significantly strengthens the CSR-value relationship, functioning as a quasi-moderator. However, profitability does not moderate the ownership-value relationship, indicating that governance mechanisms operate independently of financial performance conditions. The three-year observation window may be insufficient to capture long-term CSR dynamics. Future research should employ extended longitudinal designs, decompose ownership into distinct components, and conduct cross-country comparative analyses to enhance generalizability. This study contributes a refined CSR measurement approach using a 0-to-3 disclosure quality scoring system, advancing beyond conventional dichotomous indices. The findings reveal that profitability selectively moderates stakeholder-oriented strategies (CSR) but not governance mechanisms (ownership), offering nuanced theoretical insights for emerging market contexts. Results provide practical guidance for managers integrating sustainability investments with financial performance strategies.