Implement Effective CSR Practices

Oct 13, 2025 by thesweetdesigns.com 144 views

The Effect of Corporate Social Responsibility on Company Value with Profitability as Moderating Variables in Mining Companies Listed on the Indonesia Stock Exchange from 2011-2015

Introduction

Corporate Social Responsibility (CSR) has become a crucial aspect of business operations in today's world, particularly in the mining sector. The mining industry is often associated with environmental and social challenges, making CSR a vital component of a company's strategy. This study aims to investigate the impact of CSR on company value, with profitability as a moderating variable, in mining companies listed on the Indonesia Stock Exchange between 2011 and 2015.

Background

The mining industry is a significant contributor to the global economy, but it also poses environmental and social risks. Companies operating in this sector are under increasing pressure to adopt responsible practices and demonstrate their commitment to CSR. CSR encompasses a range of activities, including community development, environmental conservation, and social responsibility. By implementing effective CSR practices, companies can enhance their reputation, improve their relationships with stakeholders, and ultimately increase their value.

Methodology

This study employed a quantitative approach, using secondary data from 35 mining companies listed on the Indonesia Stock Exchange between 2011 and 2015. The data were analyzed using simple regression analysis and moderation regression analysis with the help of SPSS 21.0 software. The study selected 7 companies that met the criteria for sampling through Purposive sampling method.

Analysis of the Effect of CSR and Profitability on Company Value

The influence of CSR on company value is a complex issue that has been extensively studied in the literature. However, the role of profitability as a moderating variable has received relatively little attention. This study aimed to fill this gap by examining the relationship between CSR and company value, with profitability as a moderating variable.

The results of this study showed that there was a positive influence between CSR and company value, with profitability acting as a moderating variable that strengthened the effect. This finding suggests that companies that have good financial performance tend to be more successful in implementing CSR practices. Conversely, companies that do not generate profit may find it difficult to carry out CSR activities that have a positive impact.

Theoretical Framework

The theoretical framework of this study is based on the concept of CSR and its impact on company value. CSR is defined as the company's actions in making positive contributions to the community and the environment. The literature suggests that CSR can increase a company's reputation, which in turn can increase its value in the eyes of investors and other stakeholders.

Empirical Evidence

This study provides empirical evidence that CSR is not just a moral obligation for companies, but also has a direct impact on their value. In the context of mining companies in Indonesia, where environmental and social issues are often in the spotlight, the application of effective CSR can be a significant competitive advantage.

Conclusion

Overall, this study concluded that Corporate Social Responsibility has a significant influence on the company's value with profitability functioning as a moderating variable. For mining companies listed on the Indonesia Stock Exchange, investment in CSR is not only useful in terms of social responsibility, but also provides added value that can improve their position in the market. The implementation of good CSR practices can be an effective strategy for achieving sustainable growth and increasing investor attractiveness.

Recommendations

Based on the findings of this study, the following recommendations are made:

Invest in CSR: Mining companies listed on the Indonesia Stock Exchange should invest in CSR practices to enhance their reputation and improve their relationships with stakeholders.
Monitor Profitability: Companies should monitor their profitability to ensure that they have the resources to invest in CSR programs.
Implement Effective CSR Practices: Companies should implement effective CSR practices that have a positive impact on the community and the environment.
Increase Transparency: Companies should increase transparency in their CSR practices to build trust with stakeholders.

Limitations

This study has several limitations that should be acknowledged. Firstly, the study used secondary data, which may not be comprehensive or up-to-date. Secondly, the study focused on mining companies listed on the Indonesia Stock Exchange, which may not be representative of the broader mining industry. Finally, the study used a quantitative approach, which may not capture the complexities of CSR and its impact on company value.

Future Research Directions

This study provides a foundation for future research on CSR and its impact on company value. Future studies could explore the following research directions:

CSR and Company Value in Other Industries: Future studies could examine the impact of CSR on company value in other industries, such as manufacturing or services.
The Role of Stakeholders in CSR: Future studies could investigate the role of stakeholders in CSR practices and their impact on company value.
The Impact of CSR on Sustainable Growth: Future studies could examine the impact of CSR on sustainable growth and its relationship with company value.

Conclusion

In conclusion, this study provides empirical evidence that CSR has a significant influence on company value, with profitability as a moderating variable. The findings of this study have important implications for mining companies listed on the Indonesia Stock Exchange, highlighting the need for investment in CSR practices and the importance of monitoring profitability. The study also provides a foundation for future research on CSR and its impact on company value.
Frequently Asked Questions (FAQs) on the Effect of Corporate Social Responsibility on Company Value with Profitability as Moderating Variables in Mining Companies Listed on the Indonesia Stock Exchange from 2011-2015

Q: What is Corporate Social Responsibility (CSR)?

A: CSR refers to the company's actions in making positive contributions to the community and the environment. It encompasses a range of activities, including community development, environmental conservation, and social responsibility.

Q: Why is CSR important for mining companies?

A: CSR is important for mining companies because it can enhance their reputation, improve their relationships with stakeholders, and ultimately increase their value. In the context of mining companies in Indonesia, where environmental and social issues are often in the spotlight, the application of effective CSR can be a significant competitive advantage.

Q: What is the role of profitability as a moderating variable in CSR?

A: Profitability acts as a moderating variable that strengthens the effect of CSR on company value. Companies that have good financial performance tend to be more successful in implementing CSR practices, while companies that do not generate profit may find it difficult to carry out CSR activities that have a positive impact.

Q: What are the benefits of investing in CSR for mining companies?

A: Investing in CSR can provide several benefits for mining companies, including:

Enhanced reputation
Improved relationships with stakeholders
Increased value
Competitive advantage
Sustainable growth

Q: How can mining companies implement effective CSR practices?

A: Mining companies can implement effective CSR practices by:

Conducting thorough risk assessments and impact assessments
Developing and implementing robust CSR policies and procedures
Engaging with stakeholders and communities
Monitoring and evaluating CSR performance
Continuously improving CSR practices

Q: What are the limitations of this study?

A: This study has several limitations, including:

The use of secondary data, which may not be comprehensive or up-to-date
The focus on mining companies listed on the Indonesia Stock Exchange, which may not be representative of the broader mining industry
The use of a quantitative approach, which may not capture the complexities of CSR and its impact on company value

Q: What are the future research directions for this study?

A: Future research directions for this study could include:

Examining the impact of CSR on company value in other industries
Investigating the role of stakeholders in CSR practices and their impact on company value
Examining the impact of CSR on sustainable growth and its relationship with company value

Q: What are the implications of this study for mining companies?

A: The implications of this study for mining companies are:

The need for investment in CSR practices
The importance of monitoring profitability
The need for effective CSR practices to enhance reputation and improve relationships with stakeholders
The potential for CSR to provide a competitive advantage and contribute to sustainable growth

Q: What are the implications of this study for policymakers and regulators?

A: The implications of this study for policymakers and regulators are:

The need for policies and regulations that support CSR practices and encourage companies to invest in CSR
The importance of monitoring and evaluating CSR performance
The need for education and training programs to raise awareness about CSR and its benefits
The potential for CSR to contribute to sustainable development and economic growth.