Investors Psychology: Mediator of CSR and Market Capitalization

Abstract

The implementation of CSR program which is on telecommunication industries in Indonesia has still many linkages to business advantages. CSR program is considered to be important variable in investors psychology, whereas the implementation has not been optimum to be conducted by telecommunication industries in Indonesia actually. It reviews from that phenomenon for investors psychology, so the study focuses on the implementation of CSR on investors psychology and its impact to market capitalization. This study is conducted through survey of 69 institutional investors in Indonesia. It is conducted a causality analysis by using quantitative data. The study review is stated that CSR program is unable to change market capitalization directly. However, investors psychology is stated to be able to mediate the correlation of CSR in market capitalization. This finding is useful for telecommunication industries generally and for government also in taking policy which relates to CSR in Indonesia.