THE INFLUENCE OF ENTERPRISE RISK MANAGEMENT, CORPORATE SOCIAL RESPONSIBILITY, COST OF CAPITAL, AND FIRM SIZE ON FIRM VALUE
Rofiqah Wahdah- Anwar Sanusi- Prihat Assih

1Doctoral Program of Economic University of Merdeka Malang
2Post Graduate Program University of Merdeka Malang
3Post Graduate Program University of Merdeka Malang

Abstract

The implementation of Enterprise Risk Management (ERM) and CSR is currently receiving great attention, because it is an indicator for the company^s sustainability in the future. This research aims to examine the influence of ERM, CSR, Cost of Capital (CoC) and firm size on firm value in manufacturing sector companies in Indonesia. The research sample includes 56 manufacturing companies listed on the Indonesia Stock Exchange that publish annual reports and complete financial reports, with an observation period from 2016 to 2019. Firm value is proxied by the Tobins^q (TQ) value. CoC is calculated using the Weigted Average Cost of Capital (WACC), CSR is measured based on the disclosure index of each company, and the firm size LnTotal Assets. Data were analyzed using panel data regression using Eviews 12.
The research results show that ERM and CSR have a significant positive effect on firm value. This means that the better the company^s implementation of ERM and CSR implementation, the greater the company^s value. This research also found a significant negative effect of firm size on firm value. However, this research cannot prove the effect of capital costs on firm value.

Keywords: firm value, enterprise risk management, corporate social responsibility, cost of capital, firm size

Topic: Economic Disruption in the 4.0 Industrial Revolution Era