The Effect of Capital Structure, CSR, and Financial Performance on Industrial Firm Value 2019-2023

Abstract

This study investigates the influence of capital structure, corporate social responsibility (CSR), and financial performance on firm value within Indonesia's industrial sector companies. The research examines 20 industrial companies listed on the Indonesia Stock Exchange during 2019-2023 using purposive sampling methodology. Capital structure is measured using Debt to Equity Ratio (DER), CSR activities through Corporate Social Responsibility Index (CSRi), financial performance via Return On Assets (ROA), and firm value using Tobin's Q. Multiple linear regression analysis reveals that DER and ROA demonstrate statistically significant positive effects on firm value, while CSR exhibits a significant negative relationship. The findings suggest that optimal capital structure management and efficient asset utilization enhance firm valuation, whereas extensive CSR disclosures may potentially impose financial burdens. This research contributes empirical evidence from Indonesia's emerging market context, providing valuable insights for corporate financial management strategies in developing economies.