The Moderating Role of Foreign Ownership in The Relationship Between Corporate Social Performance and Firm Value: Evidence From Indonesia
DOI:
https://doi.org/10.55587/jla.v6i3.398Abstrak
Purpose: This study aims to examine the effect of Corporate Social Performance (CSP) on firm value and to investigate whether foreign ownership moderates the relationship between CSP and firm value among companies listed on the Indonesia Stock Exchange during the period 2020 to 2024.
Method: This study employed panel data from 120 purposively selected firms, resulting in 600 firm year observations. The data were analyzed using a Fixed Effects Model, which was determined through the Chow test, the Hausman test, and the Lagrange Multiplier test. CSP was measured using a nineteen item social disclosure index based on the Global Reporting Initiative framework, firm value was measured using Tobin's Q ratio, and foreign ownership was measured as a dichotomous variable reflecting shareholding above five percent.
Finding: The results indicate that CSP has a positive and significant effect on firm value, which is consistent with the predictions of stakeholder theory, legitimacy theory, and agency theory. Foreign ownership does not significantly moderate the relationship between CSP and firm value, although it shows a direct and positive association with firm value on its own.
Novelty: This study offers novelty by positioning foreign ownership as a moderating variable rather than merely a control variable in the relationship between CSP and firm value within the context of the Indonesian capital market, while also providing practical implications for regulators to strengthen internal governance mechanisms so that foreign ownership can function more effectively as a monitoring device.
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