The role of institutional ownership in strengthening to the enterprise value on the banking issuers
-
DOIhttp://dx.doi.org/10.21511/bbs.14(1).2019.05
-
Article InfoVolume 14 2019, Issue #1, pp. 42-54
- Cited by
- 1567 Views
-
121 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study examines the role of institutional ownership in moderating the relation between fundamental factors of a company and Corporate Social Responsibility (CSR) and Enterprise Value (firm value). The type of this research is an explanation research method. The sampling method was a proportional random sampling method of the population of banking companies of the Indonesian Stock Exchange. The method of data collection was documentation. The method of data analysis was Multiple Regression Analysis. The results of this study showed that simultaneous net profit margin and corporate social responsibility had a significant effect on the firm value. Partial test shows that net profit margin variables had an effect on the firm value and corporate social responsibility variables, which consist of economy, and had no influence on firm value. The results also indicated that institutional ownership strengthened the relation of fundamental factors and corporate social responsibility with the Enterprise Value.
- Keywords
-
JEL Classification (Paper profile tab)D53, G15, G32, L60
-
References61
-
Tables10
-
Figures5
-
- Figure 1. The levels of Indonesian companies disclosure
- Figure 2. The levels of Malaysian companies disclosure
- Figure 3. Several scenarios of an increase in the enterprise value with the NPM
- Figure 4. Conceptual framework
- Figure 5. Heteroscedasticity test
-
- Table 1. Operational definition and variable measurement
- Table 2. Descriptive statistics
- Table 3. Normality test
- Table 4. Multicollinearity test
- Table 5. Autocorrelation test
- Table 6. Results of the coefficient determination test
- Table 7. F-test
- Table 8. T-test
- Table 9. Results of the first residual test
- Table 10. Results of the second residual test
-
- Abukari, A. J., & Abdul-Hamid, I. K. (2018). Corporate social responsibility reporting in the telecommunications sector in Ghana. International Journal of Corporate Social Responsibility, 3(1), 2-12.
- Adelopo, I., Obalola, M., & Moure, R. C. (2017). Corporate social disclosures by banks: Between legal institution and cultural dimensions. In Sustainability and Social Responsibility: Regulation and Reporting (pp. 307-331). Singapore: Springer.
- Akhigbe, A., Makar, S., Wang, L., & Whyte, A. M. (2018). Interest rate derivatives use in banking: Market pricing implications of cash flow hedges. Journal of Banking & Finance, 86, 113-126.
- Al‐Abdin, A., Roy, T., & Nicholson, J. D. (2017). Researching corporate social responsibility in the Middle East: the current state and future directions. Corporate Social Responsibility and Environmental Management, 25(1), 47-65.
- Ameer, R., & Othman, R. (2018). Corporate Values and Corporate Social Responsibility Communication Strategies in a Small Economy. In Eco-Efficiency in Industry and Science (pp. 67-100). Cham: Springer.
- Baldini, M. A., Bronzetti, G., & Sicoli, G. (2018). The influence of corporate governance’s decision on corporate social responsibility. International Journal of Business Performance Management, 19(1), 16-35.
- Bedendo, M., & Siming, L. (2018). The mitigating effect of bank financing on shareholder value and firm policies following rating downgrades. Journal of Corporate Finance, 48, 94-108.
- Bertrand, P., & Lapointe, V. (2018). Risk-based strategies: the social responsibility of investment universes does matter. Annals of Operations Research, 262(2), 413-429.
- Bhardwaj, P., Chatterjee, P., Demir, K. D., & Turut, O. (2018). When and how is corporate social responsibility profitable? Journal of Business Research, 84, 206-219.
- Blasi, S., Caporin, M., & Fontini, F. (2018). A Multidimensional Analysis of the Relationship Between Corporate Social Responsibility and Firms’ Economic Performance. Ecological Economics, 147, 218-229.
- Buchanan, B., Cao, C. X., & Chen, C. (2018). Corporate social responsibility, firm value, and influential institutional ownership. Journal of Corporate Finance, 52, 73-95.
- Buranatrakul, T., & Swierczek, F. W. (2017). Climate Change Strategic Actions in the International Banking Industry. Global Business Review, 19(1), 32-47.
- Byun, S. K., & Oh, J. M. (2018). Local corporate social responsibility, media coverage, and shareholder value. Journal of Banking & Finance, 87, 68-86.
- Chen, N., Liang, H. Y., & Yu, M. T. (2018). Asset diversification and bank performance: Evidence from three Asian countries with a dual banking system. Pacific-Basin Finance Journal, 52, 40-53.
- Chen, Y. C., Hung, M., & Wang, Y. (2018). The effect of mandatory CSR disclosure on firm profitability and social externalities: Evidence from China. Journal of Accounting and Economics, 65(1), 169-190.
- Chou, Y. Y., & Chan, M. L. (2018). The Impact of CEO Characteristics on Real Earnings Management: Evidence from the US Banking Industry. Journal of Applied Finance & Banking, 8(2), 17-44.
- Chung, K. H., & Pruitt, S. W. (1994). A simple approximation of Tobin’s q. Financial Management, 23(3), 70-74.
- Civera, C., Casalegno, C., Mosca,F., & Maple, P. (2018). Customers’ judgments and misjudgments of corporate responsibility communication: A cross‐country investigation of the effects on confidence and trust within the banking sector. Psychology & Marketing, 35(2), 138-149.
- Cordeiro, J. J., Galeazzo, A., Shaw, T. S., Veliyath, R., & Nandakumar, M. K. (2018). Ownership influences on corporate social responsibility in the Indian context. Asia Pacific Journal of Management, 35(4), 1107-1136.
- Corporate Finance Institute (2018). What is Net Profit Margin?
- De Jong, M. D., Harkink, K. M., & Barth, S. (2018). Making Green Stuff? Effects of Corporate Greenwashing on Consumers. Journal of Business and Technical Communication, 32(1), 77-112.
- Del Brio, E. B., Perote, J., de Miguel, A., & Gómez, G. (2018). Insider Trading and Corporate Governance in the Banking Sector. New Lessons on the Entrenchment Effect. In Corporate Governance in Banking and Investor Protection (pp. 219-233). Cham: Springer.
- Eckardt, R., Skaggs, B. C., & Lepak, D. P. (2018). An examination of the firm-level performance impact of cluster hiring in knowledge-intensive firms. Academy of Management Journal, 61(3), 919-944.
- ElGammal, W., El-Kassar, A. N., & Canaan Messarra, L. (2018). Corporate ethics, governance and social responsibility in MENA countries. Management Decision, 56(1), 273-291.
- Faller, C. M., & Zu Knyphausen-Aufseb, D. (2018). Does equity ownership matter for corporate social responsibility? A literature review of theories and recent empirical findings. Journal of Business Ethics, 150(1), 15-40.
- Guiso, L., & Rustichini, A. (2018). Understanding the size and profitability of firms: The role of a biological factor. Research in Economics, 72(1), 65-85.
- Hu,Y. Y., Zhu,Y., Tucker, J., & Hu,Y. (2018). Ownership influence and CSR disclosure in China. Accounting Research Journal, 31(1), 8-21.
- Idowu, S. O. (2018). Current Issues in Corporate Social Responsibility: An Introduction. In Current Issues in Corporate Social Responsibility (pp. 1-7). Cham: Springer.
- Jaiyeoba, H. B., Adewale, A. A., & Quadry, M. O. (2018). Are Malaysian Islamic banks’ corporate social responsibilities effective? A stakeholders’ view. International Journal of Bank Marketing, 36(1), 111-125.
- Jamali, D., & Karam, C. (2018). Corporate social responsibility in developing countries as an emerging field of study. International Journal of Management Reviews, 20(1), 32-61.
- Jie, C. T., & Hasan, N. A. M. (2018). Predictors of Employees’ Job Satisfaction Through Corporate Social Responsibility (CSR) Practices in Malaysian Banking Company. Advanced Science Letters, 24(5), 3072-3078.
- Jusoh, W. N. H. W., & Ibrahim, U. (2018). The Significance of Corporate Social Responsibility Disclosure to Islamic Banks in Malaysia: An Islamic View. Journal of Islamic Finance, 7(1), 1-8.
- Kannaiah, D., & Jayakumar, A. (2018). Impact of Corporate Social Responsibility (CSR) Practices on Consumer Behavior (with Reference to FMCGs in Tamil Nadu). International Journal of Business and Management, 13(3), 28.
- Kim, J. H. (2018). Asset specificity and firm value: Evidence from mergers. Journal of Corporate Finance, 48, 375-412.
- Knudsen, J. S. (2018). Government Regulation of International Corporate Social Responsibility in the US and the UK: How Domestic Institutions Shape Mandatory and Supportive Initiatives. British Journal of Industrial Relations, 56(1), 164-188.
- Kumar, R., Pande, N., & Afreen, S. (2018). Developing a GRI-G4 based persuasive communication framework for sustainability reporting (SR): examining top 10 Indian banks. International Journal of Emerging Markets, 13(1), 136-161.
- Lamb, N. H., & Butler, F. C. (2018). The influence of family firms and institutional owners on corporate social responsibility performance. Business and Society, 57(7), 1374-1406.
- Laoworapong, M., Supattarakul, S., & Swierczek, F. W. (2018). Corporate Governance, Board Effectiveness, and Performance of Thai Listed Firms. AU Journal of Management, 13(1), 25-40.
- Law No. 40 of 2007 on Limited Liability Company (2007). State Gazette of 2007 Number 106 (Supplement to the State Gazette Number 4756).
- Li, T., & Zaiats, N. (2018). Corporate governance and firm value at dual class firms. Review of Financial Economics, 36(1), 47-71.
- Lin, C., Chang, H., & Zhu, H. (2018). The Relationship between Social Responsibility and Majority Shareholders’ Stock Selling: Considering the Mediation of Investors Tendency. Journal of Business Theory and Practice, 6(1), 12.
- Loh, L., Thao, N. T .P., Lee, S. P., & Thomas, T. (2018). Corporate Disclosure On Business Integrity in Asean.
- Loosemore, M., & Lim, B. T. H. (2018). Mapping corporate social responsibility strategies in the construction and engineering industry. Construction Management and Economics, 36(2), 67-82.
- Maqbool, S., & Zameer, M. N. (2018). Corporate social responsibility and financial performance: An empirical analysis of Indian banks. Future Business Journal, 4(1), 84-93.
- Motta, E. M., & Uchida, K. (2018). Institutional investors, corporate social responsibility and stock price performance. Journal of the Japanese and International Economies, 47(1), 91-102.
- Ngoc, N. (2018). The Effect of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from Credit Institutions in Vietnam. Asian Social Science, 14(4), 109-122.
- Parida, S., & Wang, Z. (2018). Financial Crisis and Corporate Social Responsible Mutual Fund Flows. International Journal of Financial Studies, 6(1), 8.
- Paynter, M., Halabi, A. K., & Lawton, A. (2018). The Neo-Institutionalism Influences on Corporate Social Responsibility Reporting Development in Australia: A Three Company Study. In The Goals of Sustainable Development (pp. 193-214). Singapore: Springer.
- Rahman, I. M. A., & Ismail, K. N. I. K. (2018). The moderating effect of culture on the relationship between women directors and CSR disclosure in Malaysia. Asian Journal of Accounting and Governance, 9, 133-148.
- Rao, A. (2018). Empirical Analysis of Joint Impact of Enterprise Risk Management (ERM) and Corporate Governance (CG) on Firm Value. International Review of Advances in Business, Management and Law, 1(1), 34-50.
- Salehzadeh, R., Pool, J. K., & Najafabadi, A. H. J. (2018). Exploring the relationship between corporate social responsibility, brand image and brand equity in Iranian banking industry. Journal of Islamic Accounting and Business Research, 9(2), 106-118.
- Salvioni, D. M., Franzoni, S., & Gennari, F. (2018). Social Responsibility as a factor of Convergence in Corporate Governance.Sustainability and Social Responsibility: Regulation and Reporting (pp. 29-53). Singapore: Springer.
- Saona, P., & San Martín, P. (2018). Determinants of firm value in Latin America: an analysis of firm attributes and institutional factors. Review of Managerial Science, 12(1), 65-112.
- Schipani, C. A., Dworkin, T. M., & Liu, J. (2018). The role of employee voice in promoting corporate social responsibility in China. Globalisation of Corporate Social Responsibility and its Impact on Corporate Governance (pp. 51-75). Cham: Springer.
- Sial, M. S., Chunmei, Z., Khan, T., & Nguyen, V. K. (2018). Corporate social responsibility, firm performance and the moderating effect of earnings management in Chinese firms. Asia-Pacific Journal of Business Administration, 10(2/3), 184-199.
- Spanos, L. (2018). Complementarity and interconnection between CSR and crowdfunding: A case study in Greece. In Corporate Responsibility and Digital Communities (pp. 29-49). Cham: Palgrave Macmillan.
- Stancu, A., Grigore, G., & McQueen, D. (2017). Corporate Responsibility and Digital Communities: An Introduction. In Corporate Responsibility and Digital Communities (pp. 1-7). Cham: Palgrave Macmillan.
- Syahyunan, Muda, I., Siregar, H. S, Sadalia, I., & Chandra, G. (2017). The Effect of Lerner Index and Income Diversification on the General Bank Stability in Indonesia. Banks and Bank Systems, 12(4), 56-64.
- Titus, V. K., & Anderson, B. S. (2018). Firm Structure and Environment as Contingencies to the Corporate Venture Capital-Parent Firm Value Relationship. Entrepreneurship Theory and Practice, 42(3), 498-522.
- Tran, B. (2018). Corporate social responsibility. In Encyclopedia of Information Science and Technology, Fourth Edition (pp. 671-681). IGI Global.
- Vaidya, Dheeraj (2017). What Is Enterprise Value (Firm Value)?