The Effect of Good Corporate Governance, Profitability, and Corporate Social Responsibility on Market Reaction and Company Value in the Registered Mining Industry on the Indonesian Stock Exchange

Abstract

Purpose: The objective of this analysis was to analyze the direct impact of good corporate governance, profitability and corporate social duty on market response and company value. Theoretical framework: The data analysis process used in this research is a descriptive, namely, analysis that aims to determine the extent to which the variables of moral corporate governance, profitability, and corporate social responsibility influence market reactions and firm value in mining companies listed on the Indonesia Stock Exchange which are based on empirical and theoretical facts. Design/methodology/approach: This research uses secondary data from 27 mining companies listed on the Indonesian Stock Exchange between 2017 and 2019. The data analysis methods used in this study are quantitative and qualitative descriptive research methods, as well as relational research methods. The analysis used to test the hypothesis using SEM (Structural Equation Model Analysis). Findings: The consequences of this report show that good corporate governance (1) does not directly affect market reactions with a positive correlation. (2) profitability does not directly affect market response with a negative correlation; (3) corporate social responsibility does not directly influence the market response in a positive direction; (4) good corporate governance does not directly affect company value, with a positive relationship; Research, Practical & Social implications: Since there are no evaluation standards or standard form for determining the rate of diffusion of corporate social responsibility, the assessment of the spread of corporate social responsibility remains subjective, so there will be differences in each researcher. The announcement of the dissemination of corporate social responsibility is made by the company, together with the announcement of the Annual Report, so there are other aspects made by investors in investment decisions. Originality/value: corporate social responsibility does not directly disturb the company's values with a positive relationship; market response does not directly affect company value with negative correlation; good corporate governance does not directly affect company value through a negative correlation market response; profitability does not directly affect company value through market feedback with a positive correlation.