The Importance of Corporate Social Responsibility

Oct 13, 2025 by recoveryshake.com 133 views

Effect of Corporate Social Responsibility, Capital Structure, Managerial Ownership, and Profitability of Corporate Value with Investment Opportunity Set as a Moderation Variable in Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Introduction

The value of a company is often measured by its market value, which reflects the potential to provide maximum benefits for shareholders. In the context of property and real estate companies listed on the Indonesia Stock Exchange, understanding the factors that influence company value is crucial for investors, policymakers, and company management. This study aims to analyze the effect of Corporate Social Responsibility (CSR), capital structure, managerial ownership, and profitability on company value, with Investment Opportunity Set as a moderation variable.

The Importance of Corporate Social Responsibility

Corporate Social Responsibility (CSR) is a critical aspect of a company's operations, as it reflects the company's commitment to social and environmental responsibility. CSR practices can enhance a company's reputation, attract investors, and improve its relationships with stakeholders. In the context of property and real estate companies, CSR can take the form of community development projects, environmental sustainability initiatives, and social responsibility programs. This study aims to investigate the relationship between CSR and company value, and whether CSR has a positive impact on company value.

Capital Structure and Company Value

Capital structure refers to the mix of debt and equity used by a company to finance its operations. A company's capital structure can have a significant impact on its value, as it affects the company's cost of capital, risk profile, and financial flexibility. In this study, we examine the relationship between capital structure and company value, and whether a company's capital structure has a significant impact on its value.

Managerial Ownership and Company Value

Managerial ownership refers to the ownership of shares by company management. Managerial ownership can have a significant impact on company value, as it can influence management's behavior and decision-making. In this study, we investigate the relationship between managerial ownership and company value, and whether managerial ownership has a positive impact on company value.

Profitability and Company Value

Profitability is a critical aspect of a company's operations, as it reflects the company's ability to generate profits and create value for shareholders. In this study, we examine the relationship between profitability and company value, and whether profitability has a positive impact on company value.

Investment Opportunity Set as a Moderation Variable

Investment Opportunity Set (IOS) refers to the set of investment opportunities available to a company. IOS can have a significant impact on a company's value, as it affects the company's ability to identify and capitalize on investment opportunities. In this study, we investigate the relationship between IOS and company value, and whether IOS has a moderation effect on the relationship between capital structure, profitability, and company value.

Research Methodology

This study uses a panel data regression analysis to examine the relationship between CSR, capital structure, managerial ownership, profitability, and company value. The study uses secondary data from 35 property and real estate companies listed on the Indonesia Stock Exchange from 2016 to 2021. The data is analyzed using multiple linear regression tests and interaction moderation tests.

Research Results

The results of this study show that CSR, managerial ownership, and profitability have a significant and positive impact on company value. However, capital structure does not have a significant impact on company value. Furthermore, the results show that IOS has a moderation effect on the relationship between capital structure and profitability, but not on the relationship between CSR and managerial ownership.

Conclusion

This study provides important insights for companies, especially in the property and real estate sectors. The findings suggest that companies should strengthen their CSR practices, as it has a positive impact on company value. Managerial ownership is also a significant factor, as it can influence management's behavior and decision-making. Although capital structure does not have a direct impact on company value, companies should consider strategies to optimize their financing structure. Finally, IOS can have a moderation effect on the relationship between capital structure and profitability, but not on the relationship between CSR and managerial ownership.

Recommendations

Based on the findings of this study, we recommend that companies in the property and real estate sectors should:

Strengthen their CSR practices to enhance their reputation and attract investors.
Encourage managerial ownership to influence management's behavior and decision-making.
Optimize their financing structure to reduce costs and improve financial flexibility.
Identify and capitalize on investment opportunities to increase company value.

Limitations

This study has several limitations. First, the study uses secondary data, which may not be comprehensive or accurate. Second, the study focuses on property and real estate companies listed on the Indonesia Stock Exchange, which may not be representative of companies in other industries or countries. Finally, the study uses a panel data regression analysis, which may not capture the complexity of the relationships between CSR, capital structure, managerial ownership, profitability, and company value.

Future Research Directions

This study provides a foundation for future research on the relationship between CSR, capital structure, managerial ownership, profitability, and company value. Future studies can build on this research by:

Investigating the relationship between CSR and company value in other industries or countries.
Examining the impact of IOS on the relationship between capital structure and profitability in other industries or countries.
Investigating the impact of managerial ownership on company value in other industries or countries.
Developing a more comprehensive model of the relationships between CSR, capital structure, managerial ownership, profitability, and company value.
Q&A: Effect of Corporate Social Responsibility, Capital Structure, Managerial Ownership, and Profitability of Corporate Value with Investment Opportunity Set as a Moderation Variable in Property and Real Estate Companies Listed on the Indonesia Stock Exchange

Q: What is the main objective of this study?

A: The main objective of this study is to analyze the effect of Corporate Social Responsibility (CSR), capital structure, managerial ownership, and profitability on company value, with Investment Opportunity Set as a moderation variable in property and real estate companies listed on the Indonesia Stock Exchange.

Q: What is Corporate Social Responsibility (CSR)?

A: CSR refers to the company's commitment to social and environmental responsibility. It involves practices that enhance the company's reputation, attract investors, and improve its relationships with stakeholders.

Q: How does CSR impact company value?

A: The study finds that CSR has a significant and positive impact on company value. This suggests that companies that prioritize CSR practices are more likely to increase their value.

Q: What is managerial ownership, and how does it impact company value?

A: Managerial ownership refers to the ownership of shares by company management. The study finds that managerial ownership has a significant and positive impact on company value. This suggests that when management has a personal stake in the company, they are more likely to make decisions that increase the company's value.

Q: How does capital structure impact company value?

A: The study finds that capital structure does not have a significant impact on company value. This suggests that companies should focus on optimizing their financing structure to reduce costs and improve financial flexibility.

Q: What is Investment Opportunity Set (IOS), and how does it impact company value?

A: IOS refers to the set of investment opportunities available to a company. The study finds that IOS has a moderation effect on the relationship between capital structure and profitability, but not on the relationship between CSR and managerial ownership.

Q: What are the implications of this study for companies in the property and real estate sectors?

A: The study suggests that companies in the property and real estate sectors should prioritize CSR practices, encourage managerial ownership, optimize their financing structure, and identify and capitalize on investment opportunities to increase their value.

Q: What are the limitations of this study?

A: The study uses secondary data, which may not be comprehensive or accurate. The study also focuses on property and real estate companies listed on the Indonesia Stock Exchange, which may not be representative of companies in other industries or countries.

Q: What are the future research directions based on this study?

A: Future studies can build on this research by investigating the relationship between CSR and company value in other industries or countries, examining the impact of IOS on the relationship between capital structure and profitability in other industries or countries, investigating the impact of managerial ownership on company value in other industries or countries, and developing a more comprehensive model of the relationships between CSR, capital structure, managerial ownership, profitability, and company value.

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

A: The study provides insights for investors and policymakers on the importance of CSR practices, managerial ownership, and investment opportunities in increasing company value. It also highlights the need for companies to optimize their financing structure and identify and capitalize on investment opportunities to increase their value.

Q: What are the future implications of this study for the property and real estate sectors?