The Influence of Corporate Social Responsibility on

Company Value with Corporate Governance as a

Moderator Variable

CHAPTER I

INTRODUCTION

1.1 Background

In the era of higher corporate growth, awareness of the implementation of

social responsibility becomes important in line with the increasing concern of the

global community for environmentally friendly products / goods. So far, company

assessments have only been based on financial and earnings information. Without

realizing it, in a company there is social responsibility which has an influence on

the work value of a company, especially for companies that are listed on the IDX

(Indonesia Stock Exchange). All companies that carry out activities in the

business sector related to natural resources are obliged to carry out social

responsibility. The social responsibility carried out by the company is expected to

encourage economic growth, so that the company does not only think about how

to get a profit, but also pay attention to the social and environmental conditions

around the company. When these social and environmental conditions are

neglected, it will cause environmental degradation which will have an impact on

the company, namely experiencing many losses, both short and long term losses.

Examples of short-term losses are a variety of sanctions from the authorities in

this case the two governments through local regulations. Examples of long-term
losses are a decrease in the company's level of trust in the eyes of the public, a

decrease in investor interest in investing and the worst possibility is a decline in

the company's financial condition due to the lack of trust from various parties.

The efforts made by the company to prove the company's concern for

social and environmental conditions, the company discloses its corporate social

and environmental responsibility (Corporate Social Responsibility) in its annual

financial statements. CSR, which is a form of corporate responsibility in

improving social inequality and environmental degradation that occurs as a result

of the company's operational activities. The importance of implementing

corporate social responsibility is increasingly being recognized by various

companies as a business strategy. Stakeholder theory has the view that companies

must carry out social disclosure as one of the responsibilities to stakeholders in

accordance with the opinion expressed by Amanti (2012), by implementing

corporate social responsibility, companies can create a good image for the

company so as to generate positive assessments from capable consumers. increase

their loyalty to the products the company produces. There are many relationships

between corporate social responsibility and Company value, but through previous

studies found inconsistent results.

Research conducted by Rustiarini (2010) concluded that CSR disclosure

has an effect on Company value. This conclusion contradicts the results obtained

from research conducted by Nurlela and Islahuddin (2008) and Susanto and

Subekti (2013) which concluded that CSR practices have no effect on Company

value. In addition, research conducted by Rustiarini (2010) and Siallagan and

Machfoedz (2006) concluded that corporate governance disclosure has an effect

on Company value. However, a study conducted by Sitorus, et al. (2013) stated

that GCG has no effect on Company value. The results of various studies

conclude that there are many factors that influence the value of a company.

Management is a company manager who has other goals and interests that

are contrary to the main objectives of the company and often neglects the interests

of shareholders. Legitimacy theory explains that companies continuously ensure

that they have operated and worked within the norms and rules prevailing in

society. The more forms of responsibility that a company takes to its environment,

the more the company value will also increase. Investors are more interested in

companies that have a good image in the community for the better image of the

company, the higher the higher customer loyalty and long-term nature of the Four

sales companies, which will improve the profitability of the company. If the

company runs smoothly, the company value will increase.

Company value is influenced by many factors, one of which is

goodcorporate governance and the existence ofdisclosure corporate social

responsibility (CSR). The purpose of  corporate governance is to create added

value for all interested parties (stakeholders), in this case so that company value

can increase and added value for all interested parties (stakeholders) can be

achieved, the relationship to CSR disclosure has an influence on company value. ,

because CSR implementation is a manifestation of the implementation of the

principles of corporate governance. Company value is the investor's perception of

the company, which is often associated with stock prices. Company value is not

only measured by the level of profit. According to Jensen and Meckling (1976),

the process of maximizing Company value will result in a conflict of interest

between managers and shareholders (company owners) which is often called the

agency problem. 

Corporate social responsibility occurs between a company and all

stakeholders, including customers, employees, communities, owners or investors,

governments, suppliers, and even competitors. The Company is not expected in

the responsibility which rests only on the single bottom line,which is enterprise

value(corporatevalue)is reflected in the financial condition of the course.

Corporate responsibility must be based on triple bottom lines, namely financial

aspects, corporate social responsibility and responsibility for environmental

preservation (sustainable environment responsibility). The importance of social

responsibility has been regulated in Law No. 25 of 2001 concerning Investment

and Law No. 40 of 2001 concerning Limited Liability Companies. This explains

that social responsibility is an obligation that must be carried out by companies,

not voluntary activities. The results obtained by the company from the statement

which explains that social responsibility is not a voluntary activity but an

obligation to do is that the company can increase profitability and stronger

financial performance, for example through environmental efficiency, increasing

accountability, assessment and the investment community, encouraging

commitment of employees, because they are cared for and valued, decreases the

vulnerability of turmoil with the community.

Corporate governance (corporate governance) as a moderating variable is

used in this study because theoretically, the implementation of corporate

governancecorporate governance can controlbehavior so that it does not act only

for one's own interests, but must also pay attention to surrounding social interests
to increase the value of companies. Corporate governance (CG) is a series of

processes, habits, policies, rules, and institutions that influence the direction,

management and control of a company or corporation. The company will disclose

some information if the information can increase company value. Companies can

use social responsibility information as a competitive advantage of the company.

Companies that have good environmental and social performance will be

responded positively by investors through an increase in share prices. If a

company has poor environmental and social performance, investors will doubt it,

so it will be responded negatively through price reductions (Rustriarini, 2010).

Corporate governance also includes the relationships among the stakeholders

(stakeholders)involved and destination management companies. The main parties

in corporate governance are shareholders, management, and the board of directors.

Other stakeholders include employees, suppliers, customers, banks and other

creditors, regulators, the environment, and the wider community.In addition,

corporate governance is a rule that directs all elements of the company to work

together to achieve company goals (Hafidzah, 2013). CG is expected to be able to

maintain a balance between various interests that can provide benefits for the

company as a whole, so that the results that will be obtained later can increase the

value to the company.

Based on the description, the researcher intends to conduct a study

entitled “The Influence of Corporate Social Responsibility on Company Value

with Corporate Governance as a Moderator Variable”

1.2 Research Problem 
Based on the explanation on the background, the formulation of the research

problem is as follows:

1.    Does disclosure of Corporate Social Responsibility affect company value?

2.    Does Corporate Governance as a moderating variable affect Company value?

1.3 Research Objectives

Based on the existing problems, the research objectives are:

1. To test and analyze the influence of Corporate Social Responsibility on

company value.

2. To test and analyze influence Corporate Governance as a moderating variable

on Company value.

1.4 Research Benefits

This research was conducted with the hope of providing the following benefits:

1. Academic Benefits

This research is expected to develop theories and knowledge in accounting,

especially those related to auditing related to the influence of corporate

governance as a moderating variable. in relation corporate social

responsibility and the value of companies listed on the Stock Exchange.

2. Practical Benefits

The results of this study are expected to provide information that is not only

about earnings information on company value, but information that contains

social responsibility carried out by companies to investors in the decision-

making process, especially on aspects of corporate value related to corporate.

governance on the relationship of corporate social responsibility.

1.5 Writing Systematics
The writing of this thesis is divided into 5 chapters with the systematics of writing
as follows:
CHAPTER 1 INTRODUCTION

This chapter contains the background, problem formulation, research objectives,

research benefits, and writing systematics.

CHAPTER 2 LITERATURE REVIEW

This chapter contains previous research; theoretical basis, namely positive

accounting theory; hypothesis development; and conceptual framework.

CHAPTER 3 RESEARCH METHOD

This chapter contains the research design; variable identification, operational

definition, and variable measurement; types and sources of data;methods data

collection; population, sample; and sampling techniques; as well as data analysis

techniques.

CHAPTER 4 ANALYSIS AND DISCUSSION

This chapter contains the characteristics of the research object, data descriptions,

data analysis, and discussion of research results.

CHAPTER 5 CONCLUSIONS, LIMITATIONS, AND SUGGESTIONS

This chapter contains the conclusions of the research results, the limitations of the

study, and useful suggestions for future researchers.

 CHAPTER 2

LITERATURE REVIEW

2.1 Previous research

Rustiarini (2010) examined the effect of good corporate governance and

disclosure of corporate social responsibility on Company value, concluding that

CSR disclosure has an effect on Company value. Susanto and Subekti (2013)

examined the effect of corporate social responsibility and good corporate

governance on Company value, concluding that CSR practices have no effect on

Company value. Siallagan and Machfoedz (2006) examined the relationship

betweenmechanisms corporate governance, earnings quality, and Company value.

In this study, themechanism was corporate governance proxied by managerial

ownership, the existence of an audit committee, and the proportion of the

independent board of commissioners. The results show thatmechanisms corporate

governance affect Company value (Tobin's Q). Riswari and Cahyonowati (2012)

examined the broad influence of CSR disclosure on Company value with

corporate governance as avariable, moderating concluding that with amechanism

corporate governance, monitoring of company activities can be more effective so

that it can increase Company value. Corporate governance has a positive effect on

Company value.
 No Researcher Research Variables Results
/ Year Title Research

1 Rustiarini The Effect of Variables Concludes that CSR

(2010) Good Independent: disclosure has an effect
Corporate Good Corporate on value. company.
Governance Governance, 
and Corporate
Disclosure on Social
Corporate Responsibility
Social Variable
Responsibilit Dependent:Value
y Company
Value
Company

2 Susanto Effect of Variables Independent

and Corporate Independent: Commissioner,
Subekti Social Corporate Managerial,
(2013) Responsibilit Social OwnershipInstitutional
y and Good Responsibility, Ownership and
Variables Audit Committee 
Variable Independent
Commissioner

Table 1.1. Previous Research

Numbe Research/ Research Title Variables Results

r Year Research

3 Riswari and the broad variableVariable results indicate that the

Cahyonowa influence of Independent: mechanism of

ti (2012) CSR Corporate social corporategovernance,

disclosure on responsibility monitoring of the activities

value variable of the company can be

Companywith Moderation: more effective.Variabel

corporate Corporate corporate governance

governance as governance positive influence

a moderating variable significant effect on the

Dependent: value of the company

Value company

Source: Rustiarini (2010), Susanto and Subekti (2013), Siallagan and Machfoedz

(2006), Riswari and Cahyonowati (2012).

13

2.2 Theory
2.2.1 The theory of legitimacy (legitimacy theory)
According to Dowling and Pfeffer in Ghozali and Chariri (2007),

legitimacy is important for organizations, the boundaries are emphasized by social

norms and values, and reactions to these limits encourage the importance of

analyzing organizational behavior with pay attention to the environment.

Legitimacy is considered important for the company because the community's

legitimacy to the company is a strategic factor for the company's future

development. Legitimacy also relates to social responsibility, which is one of the

principles of corporate governance to determine company value. Legitimacy is a

company management system that is oriented towards taking sides with the

community (society), individual government and community groups. Therefore,

as a system that prioritizes social responsibility, the company's operations must be

in accordance with the expectations of the community. Company legitimacy can

be increased through corporate social responsibility (CSR), to get positive values

from society in order to increase the reputation of the company's value.

Companies can invest in the environment as a form of public concern for the

environment and society. According to Dowling and Pfeffer (1975) in Rustiarini

(2010), when there is a difference between the values held by the company and

the values of society, the company will be in a position of threat.

O'Donovan (2002) in Hadi (2011: 87) argues that organizational

legitimacy can be seen as something that is given by society to companies and

something that companies want or seek from society. Thus, legitimacy is a

potential benefit or resource for the company to survive (going concern). This

definition explains that Dowling and Pfeffer (1975) in Hadi (2011: 91) state that

the company's organizational activities should be in accordance with its social and

environmental values. There are two dimensions so that the company can get

legitimate support, namely that the company's organizational activities must be in

accordance with the value system in society, the reporting of company activities

should also reflect social values.

2.2.2 Theory Agency (Agency Theory)
The agency relationship is a contract between the shareholders and

owners of the company's managers. Agency theory arises based on the

phenomenon of the separation of company owners (shareholders) from the

managers who manage the company. Agency theory views that company

management as an agent for shareholders, will act with full awareness of its own

interests (self interest), not as a wise and fair party to shareholders. The difference

in interests between the two parties can create agency conflicts. Jensen and

Meckling (1976) explain the existence of a conflict of interest in agency

relationships. This conflict of interest occurs due to differences in the objectives

of each party.

Agency theory uses three assumptions of human nature, namely humans

are generally self-interested, humans have limited thinking power about future

perceptions (bounded rationality), and humans always avoid risk (risk averse).

From the assumption of human nature, it can be seen that the agency conflicts that

often occur between managers and shareholders are based on this basic nature.

Managers in managing the company tend to prioritize personal interests rather

than interests to increase company value. The job of a manager is to act to achieve

their own interests, even though as a manager they should side with the

shareholders because they are the party who gives the manager the power to run

the company. 

The implementation of corporate governance is based on agency theory,

namely agency theory can be explained by the relationship between management

and owners, management as an agent is morally responsible for optimizing the

profits of the shareholders and in return will receive compensation in accordance

with the contract. Managers as agents have an obligation to maximize the welfare

of company owners both in the short and long term. Corporate governance is the

company's response to agency conflicts that occur in the company.

Corporate governance develops based on agency theory in which

company management must be supervised and controlled to ensure that

management is carried out in full compliance with various applicable rules and

regulations. As explained, companies need to develop a number of policies to

guide CSR implementation. Aspects of corporate governance such as managerial

ownership, institutional ownership, the proportion of independent commissioners,

and the educational background of the audit committee, as well as the ability to

analyze financial statements are seen as an appropriate control mechanism to

reduce agency conflicts.

2.2.3 Theory Stakeholder (Stakeholder Theory)

A company is not an entity that only operates for its own interests but

must be able to provide benefits to stakeholdersits. the existence of a company is

strongly influenced by the support provided by the stakeholders

company's(Ghozali and Chariri, 2007). In Bramono's (2008) study, the emphasis

oftheory stakeholder is in corporate decision making considering the needs and

interests of all parties related to company activities. Therefore, it is hoped that the

company can satisfy stakeholders in a certain level, so that the focal point of CSR

lies withmanagement stakeholder.

Stakeholders can be grouped into 2 (two) namely stakeholders

primaryand stakeholders secondary, including stakeholders primaryare

shareholders, owners, investors, employees and consumers, while those including

stakeholders secondaryare government, general public and the environment. This

CSR disclosure is important because stakeholders need to evaluate and know the

extent to which the company carries out its role in accordance with the wishes of

the stakeholders, thus demanding company accountability for CSR activities that

have been carried out.

Companies that have good environmental and social performance will be

responded positively by investors through an increase in share prices (Rustiarini,

2010). Stakeholders are all parties, both internal and external, who have a

relationship that affects or is influenced, directly or indirectly by the company.

Based on the assumption of stakeholder theory, the company cannot be separated

from the social environment. Companies need to maintain the legitimacy of

stakeholders and place them in the framework of policy and decision making, so

that they can support the achievement of company goals, namely business stability

and guarantee of going concern (Ardianto and Machfudz, 2011: 75-76).

2.2.4 Corporate Governance (CG)

According to Sutojo and Aldridge (2005), the word governance is taken

from the Latin word, governance which means directing and controlling. In the

words of business management science adapted into corporate governancemeans

in an effort to steer (directing)and control(control) activities of the organization

including companies.

Cadbury Committee in Daniri (2005; 7), explains corporate governance

as a principle that directs and controls a corporation with the aim of achieving a

balance between the strength and authority of the company in order to achieve a

balance between the strength and authority of the company in providing

accountability to shareholders in particular and stakeholders in general.

 The Indonesian Institute for Corporate Governance-IICG understanding

of corporate governance is a set of mechanisms that direct and control an

enterprise so that the company's operations in line with expectations of

stakeholders (stakeholders).

From some of the above it can be concluded that corporate governance is

a system to organize, manage and supervise the business control process that is

sustainable (sustainable)to increase the value of the company, as well as a form of

concern to stakeholders, employees, creditors and the public. Based on the general

guidelines for Corporate Governance Indonesianput forward by the National

Committee on Governance (KNKG), Corporate Governance has the following

principles:

1.    Transparency, to maintain objectivity in running a business, companies must

provide relevant information in a way that is easily accessible and understood by

stakeholders. The company must take the initiative to disclose not only issues

required by laws and regulations, but also matters that are important for decision

making by shareholders, creditors and other stakeholders.

2.    Accountability, a company must be accountable for its performance in a

transparent and fair manner. For this reason, the company must be managed

properly, measured and in accordance with the company's interests by taking into

account the interests of shareholders and other stakeholders. Accountability is a

prerequisite needed to achieve sustainable performance.

3.    Responsibility, companies must comply with laws and regulations and carry

out responsibility for the community and the environment so that business
sustainability can be maintained in the long term and gain recognition as

corporate governance.

4.    Independency, to facilitate the implementation of corporate governance, a

company must be managed independently so that each company organ does not

dominate each other and can be intervened by other parties.

5.    Fairness, in carrying out its activities, the company must always pay attention

to the interests of shareholders and other stakeholders based on the principles of

fairness and equality. 

Monks (2003) in Kaihatu (2006) reveals that corporate governance definitiveis a

system that regulates and controls companies that create value addedfor all 

stakeholders. There are two things that are emphasized in this concept, first, the

importance of the right of shareholders to obtain information correctly and timely,

and, second, the company's obligation to disclosure (disclosure) is accurate,

timely, transparent to all information about the company's performance,

ownership, and stakeholders. 

The benefits of corporate governance according to the FCGI in Reny and

Priantinah (2012), the success of companies in implementing corporate

governance will provide benefits, including:

1. Improve company performance through the creation of better decision-

making processes, increase the company's operational efficiency and

further improve services to stakeholders.

2. Make it easier to obtain cheaper financing funds so as to increase

corporate value.
 3. Restoring investor confidence to invest in Indonesia. Shareholders will be

satisfied with the company's performance because at the same time it will

increase shareholders value and dividends.

2.2.5 Corporate Social Responsibility (CSR)

According to The World Business Council for Sustainable Development

(WBCSD),  corporate social responsibility is defined as a business commitment

to contribute to sustainable economic development, through collaboration with

employees and their representatives, their families. , the local community and the

general public to improve the quality of life in ways that are beneficial to both

their own business and development. The concept of corporate social

responsibility involves a responsible partnership between the government,

community resource institutions, and local (local) communities. This partnership

is not passive and static. This partnership is a shared social responsibility among

stakeholders.

Corporate social responsibility is one of the factors that influence

company value because one of the rationale underpinning corporate social

responsibility which is currently considered the core of business ethics is the

awareness that companies not only have economic and legal obligations

toshareholders, but also has social obligations towards stakeholders

(stakeholders) such as government, consumers, investors, communities,

employees and even competitors. Stakeholder theory holds that companies must

carry out social disclosure as a responsibility to stakeholders.

In principle, corporate social responsibility or commonly known as

corporate social responsibility has various definitions, depending on the

company's vision. According to Boone and Kurtz in (Harmoni and Ade, 2008),
the notion of social responsibility in general is management support for the

obligation to consider profit, customer satisfaction and public welfare equally in

evaluating company performance. Putri (2007) in Hadi (2011) defines CSR as a

company's way of managing its business by producing products that are positively

oriented towards society and the environment in order to ensure the going

concern company's.

CSR does have many definitions, but in essence CSR is a form of

sustainable corporate economic activity. The economic activities of companies in

general are indeed founded on the basis of economic orientation, but without

forgetting social and environmental aspects in order to ensure the survival of the

company. The importance of companies in carrying out CSR is regulated in Law

No. 40 of 2007 concerning limited liability companies, as stipulated in Article 74:

1.    Companies that carry out business activities in the field and / or related to

natural resources are required to carry out Social and Environmental

Responsibility.

2.    (2) Social and Environmental Responsibility as referred to in paragraph (1) is

the obligation of the Company, whose implementation is carried out with due

regard to appropriateness and fairness.

3.    (2) Companies that do not carry out the obligations referred to in paragraph

(1) will be subject to sanctions in accordance with statutory provisions.

4.    Further provisions regarding Social and Environmental Responsibility are

regulated in a Government Regulation.

Law No.25 of 2007 concerning Investment also regulates the importance of CSR

which is written in Article 15 that every investor is obliged to apply the principles
of good corporate governance and carry out his corporate social responsibility.

This provision is intended to support the establishment of a company relationship

that is harmonious, balanced and in accordance with the environment, values,

norms and culture of the local community.

Crowther David (2008) in Hadi (2011: 59) breaks down the principles ofsocial

responsibilityinto three, namely:

1.    Sustainability, related to how companies carry out activities (actions) while

taking into account the sustainability of their resources in the future.

Sustainability revolves around partisanship and efforts to society makeuse

resources in order to pay attention to future generations. 

2.    Accountability, is an effort by a company to be open and responsible for its

activities. This concept explains the quantitative influence of the company on

internal and external parties. Accountability can be used as a medium for

companies to build an image and network with stakeholders.

3.    Transparency, is an important principle for external parties. Transparency

pertains to reporting of company activities and their impact on external parties.

Transparency is very important for external parties, playing a role in reducing

information asymmetry, misunderstanding, especially information and

accountability for various environmental impacts.

Benefits of Corporate Social Responsibility according to Gurvy Kavei (in Kartini,

2009: 124-125) emphasizes that every company that implements CSR in its

business activities will get 5 (five) main benefits as follows:

1.    Increase profitability and stronger financial performance, for example through

environmental efficiency.
2.    Improve accountability, assessment and the investment community.

3.    Encourages employee commitment, because they are cared for and valued.

4.    Reducing the vulnerability of turmoil with the community.

5.    Enhance reputation and corporate branding.  

CHAPTER 3

RESEARCH METHOD

3.1 Research

Design The research design used in this study is a quantitative approach because it

focuses on hypothesis testing, the data used is quantitative (measurable data), and will

produce conclusions. This study aims to examine the effect of corporate social

responsibility (independent variable) on firm value (dependent variable) with corporate

governance as a moderating variable (moderating variable).

3.2 Variable Identification, Operational Definition, and Variable Measurement The

variables used in this study are the dependent variable and the independent variable.

The dependent variable to be tested in this study is firm value. The independent

variable to be tested in this study is corporate social responsibility. Apart from the two

variables above, this study also contains moderating variables. The moderating variable

in this study is corporate governance.

Meanwhile, the operational definition and measurement of each variable are:

1.    Company value is the selling value of the company or the growing value for

shareholders, the value of the company will be reflected in the market price of its

shares. Company value can provide maximum prosperity for shareholders if the

company's share price increases. This study uses the firm value variable as the

dependent variable which is calculated using the Tobins Q ratio. According to White et
al. (2002) in (Reny and Priantinah, 2012), Tobins Q can be formulated as follows: Q:

2.    Corporate Social Responsibility (CSR) is a company or business world commitment

to contribute to sustainable economic development by paying attention to corporate

social responsibility and prioritizing the balance between attention to economic, social

and environmental aspects. The independent variable in this study is CSR. Corporate

social responsibility. Saraswati and Hadiprajitno (2012) state that corporate social

responsibility can be calculated from the CSR disclosure index (CSRI). To determine the

level of social information disclosure in the annual report, a dichotomy approach is

used, where each CSR item in the research instrument is given a value of 1 if disclosed,

and a value of 0 if not disclosed. Next, the scores of each item are added up to get the

overall score for each company. The CSRI calculation formula is as follows:

3.    Corporate governance of this study as a moderating variable using institutional

ownership. Institutional ownership is measured using the percentage (%) level of share

ownership by banks, insurance companies, pension funds, mutual funds, and other

institutions, then divided by the total shares owned by the company. The moderating

variables (corporate governance) in this study are proxied using:

a. Institutional ownership as measured by the percentage of share ownership by banks,

insurance companies, pension funds, mutual funds, and other institutions divided by

the total number of shares outstanding.

 Share owned by institution
INST =
total share

5. Types of Data and Data Sources The

type of data used in this research is quantitative data in the form of annual reports of

manufacturing companies listed on the IDX in 2013-2015. Sources of data were

obtained from thewebsite IDX(www.idx.com) and website each company'sin the form

of secondary data.

6. Data Collection Methods

In this study data collection was carried out using documentation / archive techniques.

By documenting the company's financial statements obtained from manufacturing

companies listed on the IDX. Data collection was also carried out by means of literature

study, namely through collection and secondary data. Literature studies are obtained

from books, literature, articles, previous journals and internet sites related to research

themes. 

7. Population, Sampling, and Sampling Techniques The

population of this study were all manufacturing companies listed on the Indonesia

Stock Exchange during the 2013-2015 period. The sample selection is used by using

purposive sampling method,sampling namely thetechnique using certain considerations

and limitations so that the selected sample is relevant to the research objectives. The

criteria used to select samples are as follows:

1.    Manufacturing companies listed on the IDX during the 2013-2015 period

respectively.

2.    Manufacturing companies that issued a complete annual report for the years 2013-

2015 respectively.
3.    Manufacturing companies that disclose CSR in their annual reports for 2013-2015

respectively.

4.    Have complete data related to the variables used in the study.

8. Data Analysis Techniques The data

analysis technique in this study uses the help ofsoftware SPSS version 23with the

following stages: a. Descriptive Statistics Descriptive

statistics provide interesting measures of great importance for data and samples.

Descriptive statistics are used to describe the profile of the sample data which includes

the mean, median, maximum, minimum, and standard deviation and to determine the

level of disclosure of the variables studied. The variables studied using descriptive

analysis in this study are corporate social responsibility, corporate governance and firm

value. b. Classical Assumption Test This

research will be tested using the regression method to test the effect of moderating

variables by testing the absolute difference value. To produce the correct value, first a

classic assumption test will be carried out in determining the accuracy of the model.

The classical assumption test that will be used includes the normality test,

multicollinearity test and heteroscedasticity test. c. NormalityThe normality

Testtest is conducted to determine whether the regression model, the dependent

variable and the independent variable have a normal distribution or not. A good

regression model is data that is normally distributed or close to normal. The normality

test in this study used histogram graphic analysis and normal probability plots, and non-

parametric statistical analysis of one sample Kolmogorov-Smirnov test. d.

Multicollinearity Test Multicollinearity

test aims to test whether the regression model found a correlation between

independent variables (independent). A good regression model should not have a

correlation between the independent variables.

e. HeteroscedasticityThe Heteroscedasticity

Testtest aims to test whether the regression model has unequal variance from one

observation to another. A good regression model is a model that does not occur

heteroscedasticity (Ghozali, 2009). The way to detect the presence or absence of

heteroscedasticity is to see the plot graph between the dependent variable, namely

ZPRED and its residual, namely SRESID. Detection of the presence or absence of

heteroscedasticity can be done by looking at the presence or absence of a certain

pattern on the scattterplot graph between SRESID and ZPRED where the Y axis is the

predicted Y, and the X axis is residual (Y predicting real Y) that has been studied. The

basis of the analysis is:

a.    If there is a certain pattern, such as the existing dots forming a certain regular

pattern (wavy, widened then narrowed), it indicates that heteroscedasticity has

occurred.

b.    If there is no clear pattern, and the dots spread above and below the zero on the Y

axis, there is no heteroscedasticity.

Apart from that, a statistical test was also carried out which could ensure the accuracy

of the results. The statistical test that can be used to detect the presence or absence of

heteroxicity is the Glejser test. (Ghozali, 2006). The Glejser test proposes to regress the

absolute residual value of the independent variable (Gujarati, 2003 in Ghozali, 2006)

with the regression equation:

Ut = α + βXt + vt
If the independent variable is statistically significant in affecting the dependent variable,

then there is an indication of heteroscedasticity. If the independent variable is not

statistically significant in affecting the dependent variable the absolute value of Ut

(AbsUt) with a significant probability above the 5% confidence level, it can be

concluded that the regression model does not contain heteroscedasticity. f.

AutocorrelationThe autocorrelation

Testtest aims to test whether in a regression model there is a correlation between

confounding errors in period-t with errors in period t-1. The Durbin Watson test is only

used for level 1 autocorrelation (first order autocorrelation) and requires an intercept

(constant) in the regression model and there is no lag variable between the

independent variables. The hypotheses to be tested are: Ho = no autocorrelation (r =

0), and Ha = no correlation (r ≠ 0). (Ghozali, 2006). g. Hypothesis Testing

To test the hypothesis in this study, the coefficient of determination test, the individual

parameter significance test (t statistical test), and simultaneous significance test (f

statistical test) were used.

1. Simultaneous Significance Test (Test Statistic F)

This test is conducted to test whether the independent variables as a whole affect the

dependent variable. The test criteria are:

a.    Ho is accepted if the probability value (sig f)> (0.05) and p value>

0.05

b.    Ho is rejected if the probability value (sig f) <(0.05) and p value <0.05

2.    The coefficient of determination (goodness of fit test)

Analysis of the coefficient of determination is used to measure the extent to which

capital is able to apply variations in the dependent variable. The coefficient of

determination shows the percentage effect of the independent variable on the

dependent variable which is stated in the adjusted R square.

3.    Test of Significance of Individual Parameters (t statistical test)

This test is conducted to test whether each independent variable has a significant effect

on the dependent variable. The test criteria are:

a.    Ho is accepted if the probability value (sig t)> (0.05) and p value>

0.05

b.    Ho is rejected if the probability value (sig t) <(0.05) and p value <

0.05