Journal of Asian Business and Management Vol. x No.

x,
xxxxx 20xx

Article Type: Research Paper

The Effect of Corporate

Social Responsibility on
Company Value: Evidence
JABM
from Indonesia
Author 1, Author2*, Author3

Abstract:

AFFILIATION: Abstracts are written using: book antiqua 10, single spaced,
1,2
Accounting Dept, Faculty of
with a maximum of 130 words, keywords 3-5 words, written in
Economics, State University of English. abstrak ditulis menggunakan: book antiqua 10, spasi
Medan, Indonesia tunggal, dengan maksimum 130 kata, keywords 3-5 kata.
Abstracts are written using: book antiqua 10, single spaced,
3
Accounting Dept, Economics with a maximum of 130 words, keywords 3-5 words, written in
and Business Faculty, English. abstrak ditulis menggunakan: book antiqua 10, spasi
University of Riau, Indonesia tunggal, dengan maksimum 130 kata, keywords 3-5 kata.
Abstracts are written using: book antiqua 10, single spaced,
*CORRESPONDENCE: with a maximum of 130 words, keywords 3-5 words, written in
[email protected] English. abstrak ditulis menggunakan: book antiqua 10, spasi
tunggal, dengan maksimum 130 kata, keywords 3-5 kata

CITATION:
Keywords: Corporate Social Responsibility, Firm Value, MVE,
Author, R.R., Author, C., Tobin's Q
Author,S., (2025). The Effect
of Corporate Social
Responsibility on Company
Value at Mining Companies
Introduction
Listed on The Indonesia Stock
Exchange. Journal of Asian Indonesia is a country that has the potential to
Business and Management, x become a developed country. In 2022, Indonesia was
(x), 1-9. removed from the list of developing countries in the
ARTICLE PROCESS World Trade Organization (WTO). One of the
Received : characteristics of a developed country is economic
Oct 10, 2024 stability. Economic stability allows companies to plan
Revised: long-term strategies with lower risk, which ultimately
Dec 22, 2024
increases investor confidence and boosts the company's
Accepted:
Jan 03, 2025 value. According to Damodaran (2006), firm value is the
current value of cash that is expected to come in in the
future, discounted at a rate of return that reflects the risk
and funding structure used. Company value is one of the
This work is licensed under critical indicators that reflects how well a company is
a Creative Commons Attribution-Non-
Commercial-No-Derivatives 4.0 International
managed and perceived by stakeholders, including
license investors. In the capital market, company value is a major
concern because it can affect investment decisions and
the performance of the company's shares. In general,
company value is measured through stock market value,
 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

which reflects investor expectations of the company's

ability to generate profits in the future.

Increasing company value can have a positive impact on investor

confidence, company reputation, and long-term financial stability. CSR
has become one of the key factors in increasing corporate value.
Through the implementation of CSR programs, companies can improve
brand image, reduce business risks, and ultimately increase investor
confidence. Recent studies confirm that there is a positive correlation
between CSR implementation and increased corporate value.
This study focuses on analyzing the impact of Corporate Social
Responsibility on the valuation of technology companies listed on the
IDX. With the increasing public attention to corporate social
responsibility, it is important to understand whether CSR initiatives are
directly related to the market value of the company, or whether there
are other factors that moderate the relationship. It is hoped that
through this study, we can obtain a more comprehensive picture of
how CSR practices can contribute to increasing company value,
especially in the context of the ever-changing Indonesian capital
market.

Literature Review
Company Values
According to Damodaran (2006), company value is the present
value of all income that is expected to be obtained in the future, after
being reduced by risk factors and adjusted for capital costs. Laili et al.
2019, (in Fadrul et al, 2020) define Company value as a representation
of company performance reflected in stock prices. This value serves as
a reference for investors, indicating the price they are willing to pay if
the company decides to sell its shares.
In company valuation, the MVE ratio and Tobin's Q are often
used as indicators (Palupi, 2008; Nurlela and Islahuddin, 2008). The
MVE ratio, in particular, reflects market expectations of the company's
future performance. A high MVE value indicates that investors are
optimistic about the company's growth potential and profitability
(Palupi, 2008; Anita, 2009)

Corporate Social Responsibility (CSR)

The European Commission (Weber, 2008; Fadrul et al., 2020;
Veronika et al., 2022) defines CSR as a business approach in which a
company consciously incorporates social and environmental
considerations into all its operational activities. The aim is to contribute
to sustainable development by involving various stakeholders.

Journal of Asian Business and Management, 2025 | 2

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

According to Fontaine (2013), CSR is like a company adjusting itself to

the expectations of all stakeholders, from customers to the wider
community. The company must ensure that its actions are by the
values held by these various groups.
The level of reporting of a company's corporate social
responsibility (CSR) can be measured by evaluating its annual CSR
report using a checklist based on the framework, Hakston & Milne 1996
(in I Gusti Ayu Purnamawati, 2014).
In this case, the criteria used is CSR Disclosure (general GRI), which
consists of 3, namely economic, social and environmental aspects.

Indonesia Stock Exchange (IDX)

BEI is an institution that serves as a market for trading stocks
and other securities in Indonesia. BEI provides a platform for
companies to sell shares to the public and for investors to buy and sell
shares. In addition, BEI also regulates and supervises trading to ensure
that all transactions are fair and transparent. The IDX plays a vital role
in the Indonesian economy by providing access for companies to
obtain capital and for investors to invest. With the IDX, investors can
diversify their portfolios and companies can expand their businesses
through fundraising.

Research Hypothesis
CSR is a company's effort to bear the negative impacts of its
business activities on society and the environment. By disclosing its
CSR practices, companies can improve their reputation and appeal to
donors, clarify brand positioning, and increase sales. With the
increasing disclosure of CSR, the company's reputation will also
increase, so investors tend to consider the company to be of good
quality and become more willing to invest, thereby increasing firm
value. Previous research on the relationship between CSR and
company value has produced mixed findings. Teguh and Devi (2021)
found a positive effect of CSR on company value, while Nurlela and
Islahuddin (2008) found no significant correlation. This contradiction
prompted researchers to hypothesize as follows:
H1: CSR influences the value of mining companies listed on the IDX.
H2: CSR does not influence mining companies listed on the IDX

Research Methods

Operationalization of Variables
Dependent Variable. This research uses the company value as
the variable explained (dependent variable). To measure the company
value, researchers use two, namely Market to Book Value of Equity
(MVE) (Palupi, 2008; Anita, 2009) and Tobin's Q (Zulfikar, 2006). The
MVE formula, Palupi (2008) can be described as follows:
MVE = Outstanding Shares × Stock Price Total Equity

Journal of Asian Business and Management, 2025 | 3

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

Tobin's Q is commonly used to measure how well the market values a

company and how well the company is performing. Simply put, the
Tobin's Q formula is:
Q= Market Capitalization+LiabilityTotal Assets

The Tobin's Q formula frequently used in research is the version

developed by Chung and Pruitt in 1994, and Klapper and Love in 2002.
Q = MVS + DTA
Tobin's Q value can be used as an indicator to assess market
perception of a company's value. Based on Risman's research, Tobin's
Q value is explained as follows: (1). Tobin's Q is low (0-1): which means
the market value of the company is less than the replacement cost of
its assets. This indicates that the market views the company as less
attractive and possibly undervalued. (2). High Tobin's Q (>1): means
the company's market value is higher than the book value of its assets.
This could indicate the presence of high-value intangible assets or high
market expectations of the company's future growth.
Independent Variables. CSR is a factor studied in this study. The
calculation of CSR is determined using the CSR Disclosure criteria set
by the General GRI. The annual report serves as the main document of
this study, and the assessment of the volume of CSR disclosure is
carried out through sentence counting, as stated by Suhardjonto
(2012). The measurement of CSR disclosure uses a social responsibility
checklist, where items that are not listed in the annual financial report
are scored "0", while those that are disclosed are scored "1". This
scoring system allows researchers to evaluate the extent to which
companies report their CSR activities in their financial reports, as
stated by Teguh and Devi (2021). According to Puspitasari and
Ermayanti (2019), the CSR calculation formula is as follows :
CSRIj = ∑xijnj

Types of Research and Data Analysis

This study applies a quantitative approach to test the correlation
between research variables. The data used consists of secondary
information sourced from public records, including annual reports and
sustainability disclosures from companies listed on the Indonesia Stock
Exchange. Furthermore, this data is analyzed through simple linear
regression using SPSS 26 statistical software to evaluate the research
hypothesis. As a case study, data from PT Timah Tbk, PT Adaro Energy
Tbk, and PT Aneka Tambang Tbk are analyzed within the scope of this
research.

Population and Sampling Techniques

The objects studied are mining companies listed on the IDX. The
samples used are annual reports and sustainability reports from 3
companies taken from 2019-2023. The companies are PT. Timah Tbk,
PT. Adaro Energy Tbk, and PT Aneka Tambang Tbk. The random

Journal of Asian Business and Management, 2025 | 4

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

sampling method is applied to ensure the representativeness of the

sample to the population.

Journal of Asian Business and Management, 2025 | 5

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

Results and Discussion

Descriptive Statistical Analysis
The results of descriptive statistical testing are:

Table 1. Descriptive Statistic Test Output

N Min Max Mean Std. Deviation
Company Values 15 .30 8.30 2.5147 3.25146
CSR 15 .60 1.00 .9533 .12459
Valid N (listwise) 15
Source: Researcher (2024)

It can be seen that the minimum value of the company's value is

0.30 from PT Adaro Energy Tbk, the maximum is 8.30 from PT Aneka
Tambang Tbk, the mean is 2.5174, and the standard deviation is
3.25146. CSR has a minimum value of 0.60 from PT Aneka Tambang
Tbk in 2020, a maximum of 1.00 from the three companies, a mean
of 0.9533, and a standard deviation of 0.12459.

Classical Assumption Test

Normality Test

Table 2. Normality Test Results

Source: Researcher (2024)

Based on the test results above applying Kolmogorov-Smirnov, it can

be seen that the Asimp. Sig. (2-tailed) value is normally distributed
because >0.05, namely 0.010.

Journal of Asian Business and Management, 2025 | 6

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

Linearity Test
Table 3. Linearity Test Results
Mean
Sum of Squar
Squares Df e F Sig.
Company_valu Between (Combine 9,04 2 4,52 4.19 .04
es Groups d) 4 2 1 2
Linearity 8,73 1 8,73 8,09 .01
CSR_SCORE 0 0 3 5
Deviation .313 1 .313 .290 .60
from 0
Linearity
Within Groups 12,9 12 1,07
46 9
Total 21,9 14
89
Source: Researcher (2024)

The image above shows a significant linear relationship between

variables X and Y. This can be seen from the deviation from linearity
in the Sig column, which is 0.600, which is more than 0.05.

Heteroscedasticity Test

Table 4. Heteroscedasticity Test

a
Coefficients
Unstandardized Standardized
Coefficients Coefficients Sig
Model B Std. Error Beta T .
1(Constant) .770 .176 4.37 .00
8 1
CSR_SCOR .879 1,093 .218 .804 .43
E 6
a. Dependent Variable: ABS_RES

Source: Researcher(2024)
From the output, it is stated that the significance level is 0.436
>0.05, so there is no heteroscedasticity.

Simple Linear Regression

Table 5. Variables Entered/Removed
Source: Researcher (2024)
Variables Variables
Model Entered Removed Method
1 CSR_SCORE b . Enter
a. Dependent Variable: Company Value
b. All requested variables entered.
Journal of Asian Business and Management, 2025 | 7
 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

The table explains that the dependent variable is the Company

Value, the independent variable is the CSR score. The 'enter' method
is used to enter all independent variables into the regression model
simultaneously.

Table 6. Model Summary

Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .630 .397 .351 1.00991
a

a. Predictors: (Constant), CSR_SCOR

From the table above we know the relationship value (R) is 0.630.
Then it is also known that the coefficient of determination (R
Square) is 0.397, which means the influence of CSR on Company
Value is 39.7%.

Table 7. Anova
Sum of
Model Squares df Mean Square F Sig.
1 Regression 8,730 1 8,730 8,56 .012
b
0
Residual 13.259 1 1,020
3
Total 21,989 1
4
a. Dependent Variable: Company Value

b. Predictors: (Constant),CSR_SCOR

The calculated f value based on the output above is 8.560 with

Sig. 0.12>0.05. The resulting regression model indicates that there
is a causal correlation between CSR and company value.

Table 8. Coefficients
Unstandardized Standardized
Coefficients Coefficients Sig
Model B Std. Error Beta t .
1(Constant) -.160 .279 -.57 .57
4 6
CSR_SCORE -5.082 1,737 -.630 - .01
2.92 2
6
a. Dependent Variable: Company Value
Source: Researcher (2024)

Journal of Asian Business and Management, 2025 | 8

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

From the results above, it can be seen that the constant a value is -
0.160, and the CSR score value is -5.082, then:
Y= a+Bx
Y= -0.160+(-5.082)X

This means: that -0.160 is the consistent value of the Company value
variable. The CSR regression coefficient is -5.082, meaning that each
coefficient does not have a positive effect.
Decision-making. The Sig. value of 0.012>0.05, shows that CSR does
not contribute significantly to increasing company value. From the
value of 1, it can be seen that the t value is -2.926 <t table 2.1604.
The results of this study indicate that variable X does not have a
significant effect on changes in variable Y.

Discussion
The negative CSR regression coefficient (-5.082) indicates an
inverse relationship between CSR and firm value. The results of the
significance test showing a p-value of 0.012 strengthen this finding,
namely that the influence of CSR on firm value is statistically
significant. However, the direction of the influence is negative, contrary
to the initial hypothesis.
From the R-Square result of 0.397, it is known that the CSR variable is
only able to explain 39.7% of the variation in company value. Although
its influence is significant, this also strengthens the finding that CSR
does not play a major role in increasing company value, especially in
the context of providing a positive influence.
The significance value of the impact of CSR on company
valuation is 0.012, which is less than 0.05. This shows that the
influence of CSR on company value is significant. However, the
direction of the influence, as indicated by the negative regression
coefficient, is negative.
The F value is 8.560, with a t-sig of 0.012, indicating that the overall
regression model has statistical significance. This finding indicates that
although Corporate Social Responsibility (CSR) affects firm value, this
effect is not an increase; rather, it results in a decrease in firm value. In
addition, the t-test results reveal that the calculated t value is -2.926,
which is smaller than the critical t value of 2.1604. This further
strengthens that CSR does not have a positive impact on firm value,
because the t-test results show a negative impact. This finding is in line
with research conducted by Afifah, Astuti, and Irawan (2021).

Conclusion
From the results of the tests and explanations carried out on mining
companies in this study, it can be concluded that: (a). There is no
positive influence of CSR on company value. (b). This effect is
statistically significant, but in a direction that does not support an
increase in firm value.

Journal of Asian Business and Management, 2025 | 9

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

Bibliography

Afifah, N., Astuti, SWW, & Irawan, D. (2021). The Influence of Corporate
Social Responsibility (CSR) and Company Reputation on Company
Value. EKUITAS (Journal of Economics and Finance), 5 (3), 346–
364. https://doi.org/10.24034/j25485024.y2021.v5.i3.4644
Fadrul, Budiyanto, & Asyik, NF (2020). Financial Performance and Firm
Value (Issue July).
Fontaine, M. (2013). Corporate Social Responsibility and Sustainability:
The New Bottom Line? In International Journal of Business and
Social Science.
Damodaran, A. (2006). Valuation Approaches and Metrics: A Survey of
the Theory and Evidence. Foundations and Trends® in Finance,
1(8), 693–784. https://doi.org/10.1561/0500000013
Veronika, I., Azmi, Z., & Marlina, E. (2022). Apakah Corporate
Governance Dan Pengungkapan Lingkungan Mempengaruhi
Kinerja Keuangan Pada Masa Covid-19? Jurnal Akuntansi STIE
Muhammadiyah Palopo. 8. 36.
https://doi.org/10.35906/jurakun.v8i1.966
Nurlela, R., dan Islahuddin. (2008). Pengaruh Corporate Social
Responsibility terhadap Nilai Perusahaan dengan Prosentase
kepemilikan Menejerial sebagai Variabel Moderating.Simposium
Nasional Akuntansi XI. Pontianak
Palupi. (2008). Pengaruh Kepemilikan Institusional terhadap Nilai
Perusahaan: Sebuah Tinjauan Hubungan Non-Linier (Studi Empiris
pada Perusahaan yang Terdaftar di Bursa Efek Indonesia). The
second National Conference UKWMS. Surabaya
Purnamawati, I.G.A., Adi Yuniarta, G., & Ria Astria, P. (2017). Good
Corporate Governance and Its Influence on Company Value
Through Corporate Social Responsibility Disclosure. Journal of
Finance and Banking , 21 (2), 276–286.
https://doi.org/10.26905/jkdp.v21i2.505

Risman, A. (2021). Exchange Rates and Company Value (Issue March).

Suhardjanto, D., (2008). Environmental Reporting Practices: An
Evidence From Indonesia. Jurnal Akuntansi dan Bisnis. Vol. 8: 33-
46
Zulfikar, (2006). Analisis Good Corporate governance di Sektor
Manufaktur: Pengaruh Penerapan Good corporate governance,

Journal of Asian Business and Management, 2025 | 10

 Author
The Effect Of Corporate Social Responsibility On Company Value At Mining
Companies Listed On The Indonesia Stock Exchange

return on Asset dan Ukuran perusahaan terhadap nilai Pasar

Perusahaan, Benefit., Vo. 10(2): 130-141

Journal of Asian Business and Management, 2025 | 11