Nur Khusniyah Indrawati

Corporate governance (CG) and corporate social responsibility (CSR) are important subjects for corporate sustainability that affect firm value (FV). At the same time research results in several countries provide diverse empirical evidence. This study analyzes the impact of corporate governance (CG) and corporate social responsibility (CSR) on firm value (FV) through the cost of capital (CoC) in public companies of Indonesia. The research sample includes 27 companies that publish sustainability reports and corporate governance reports, with an observation period from 2010 till 2016. This study presents the analysis of three firm value proxies (Tobin’s q (TQ), Price Earnings Ratio (PER), and Price to Book Value (PBV)). Results of hypotheses testing using Partial Least Squares (PLS) show that CG and CSR have both direct and indirect effects on FV. These findings are consistent for all three firm value assessments. According to direct testing, CG has a negative effect on FV, while CSR has a positive effect. The CoC acts as a mediating variable in this relationship. The CG and CSR have a negative effect on CoC, while CoC has a negative effect on FV. The findings show that CG and CSR can improve the company performance and corporate image internally and externally, thereby increasing the investors` confidence, and companies have the opportunity to obtain inexpensive funding sources that can reduce CoC. A decrease in CoC can increase profitability and have an impact on FV increasing.

Spiritual capital is one of the essential intellectual capital that drives individuals and organizations to run the business following the law and standards. As a result, organizations can gain trust and integrity by following the rules and affecting their competitive advantages. This study analyzes competitive advantage based on spiritual capital, innovative work behavior, and organizational learning, which are reflected in two dimensions: exploratory and exploitative learning. The research population was 53 businesspersons of handicraft industries in the Malang City of Indonesia selected by saturated sampling techniques. A research instrument collected data in a structured questionnaire distributed to business people; the data were analyzed with SmartPLS 3.0. The results are interesting because they showed that spiritual capital did not significantly affect competitive advantage, both directly with a coefficient of 0.090 and as a mediator with a coefficient of 0.030 for innovative work behavior on competitive advantages. Other results of this study concluded that innovative work behavior was affected significantly by exploratory learning with a coefficient of 0.412 and exploitative learning with a coefficient of 0.139. Indirectly, exploratory and exploitative learning have a significant impact on spiritual capital with a coefficient of 0.139 for exploratory learning and 0.112 for exploitative learning. Spiritual capital was affected significantly by innovative work behavior with a coefficient of 0.331, and innovative work behavior affected competitive advantages with a coefficient of 0.371.