Good corporate governance and firm value: the role of corporate social responsibility

Abstract

This study aims to extend the relationship of Good Corporate Governance with Firm Value, throughout propose and fill the Corporate Social Responsibility as mediate variable at the banks of Indonesia government, listed in Indonesia Stock Exchange in 2012. The Structural Equation Modeling used to analysis the 120 data observed from the financial statement and other documents of five banks, six branches per bank, for four years, These findings are consistent with the expectation that applying of Corporate Social Responsibility, where the Good Corporate Governance directly has no significant effect on the increase of firm value, but has a significant effect on the implementation of Corporate Social Responsibility, so by applying the Corporate Social Responsibility, the firm value becomes significantly increased, it proves that Corporate Social Responsibility acts perfectly as a mediating variable over Good Corporate Governance and firm Value.