The Effect of Financial Performance and Intellectual Capital on Firm Value with CSR as a Mediating Variable in Banking Industry

Abstract

This study aimed to obtain empirical evidence on how firm value is influenced by intellectual capital in addition to financial performance with CSR reports as a mediating variable in the banking industry. Based on the path-analysis performed among the banks operating in Indonesia during 2016-2018, the results show that financial performance and intellectual capital have a direct and positive effect on company value, but there is no significant effect of CSR as a mediating variable. Therefore, CSR activities in banking do not strengthen the intellectual capital and profitability in increasing firm value. By the results of this research, bankings should increase their useful CSR activities so that the funds that have been spent can be more beneficial to increase the value of the company.