The Effect of Good Corporate Governance and Corporate Social Responsibility on Firm Value with Financial Performance as an Intervening Variable
Year: 2026
Type: article
Abstract: Firm value reflects how investors assess a company’s prospects, yet evidence on whether corporate governance and social responsibility enhance value remains mixed, particularly regarding the role of financial performance as an intervening mechanism. This study examined the effects of Good Corporate Governance and Corporate Social Responsibility on firm value and assessed whether financial performance mediated these relationships among mining companies listed on the Indonesia Stock Exchange. A quantitative design was employed using secondary panel data from annual and sustainability reports. From a population of 49 mining companies, purposive sampling produced 25 companies and 75 firm-year observations for 2023–2025. Data were analyzed using EViews 13 through panel-data regression, model selection, classical assumption testing, hypothesis testing, path analysis, and the Sobel test. The results showed that Good Corporate Governance positively and significantly affected financial performance (t = 2.2235; p = .0481) and firm value (t = 2.7153; p = .0083). Corporate Social Responsibility also positively and significantly affected financial performance (t = 2.1265; p = .0437) and firm value (t = 2.9331; p = .0045), while financial performance had a strong positive effect on firm value (t = 48.7043; p < .001). Financial performance mediated the relationship between Good Corporate Governance and firm value (Sobel = 2.7111; p = .0067), whereas the study reported no mediation for Corporate Social Responsibility. The model explained 97.2% of the variation in firm value. The study contributes integrated evidence from the Indonesian mining sector and highlights governance, social responsibility, and financial performance as important considerations for sustainable value creation.
Institution: Sekolah Tinggi Ilmu Ekonomi Makassar Bongaya
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7225178405