Universal Journal of Accounting and Finance Vol. 9(6), pp. 1322 - 1331
DOI: 10.13189/ujaf.2021.090611
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Corporate Social Responsibility, Firm Value, and Financial Constraints: A Signal of Corporate Liquidity

Maria Yosaphat Dedi Haryanto ^1,2,*, Anis Chariri ³, Etna Nur Afri Yuyetta ^3
1 Doctoral Program, Faculty of Economics and Business, Universitas Diponegoro, Indonesia
² Faculty of Business and Accounting, Universitas Katolik Musi Charitas, Indonesia
³ Faculty of Economics and Business, Universitas Diponegoro, Indonesia

ABSTRACT

The concept of corporate social responsibility (CSR) has gained much attention and has been currently practiced by many companies. This study examined the role of CSR disclosure as a signal on the corporate liquidity in creating value for the firms. We examined the effects of moderation using subgroup analysis on a sample of 77 manufacturing sector firm that listed on IDX with three years data observations. By using the Chow test, the results show that CSR disclosure is related with firm value in non-financial constraints (NFC) firms compared to financial constraints (FC) firms. However, the two groups of companies have opposite effects. Companies with non-financial constraints have a positive direction while the other group has no specific pattern for the FC sample. The empirical evidence showed that firms with financial constraints report less information about their CSR activities than firms with non-financial constraints. Our findings suggest that company with non-financial constraints can confidently and strategically increase CSR investment to enhance firm value. However, the company with financial constraints needs to carefully examine the effects of CSR on firm value when making CSR-related decisions.

KEYWORDS
Corporate Social Responsibility Disclosure, Financial Constraints, Firm Value, Liquidity

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Maria Yosaphat Dedi Haryanto , Anis Chariri , Etna Nur Afri Yuyetta , "Corporate Social Responsibility, Firm Value, and Financial Constraints: A Signal of Corporate Liquidity," Universal Journal of Accounting and Finance, Vol. 9, No. 6, pp. 1322 - 1331, 2021. DOI: 10.13189/ujaf.2021.090611.

(b). APA Format:
Maria Yosaphat Dedi Haryanto , Anis Chariri , Etna Nur Afri Yuyetta (2021). Corporate Social Responsibility, Firm Value, and Financial Constraints: A Signal of Corporate Liquidity. Universal Journal of Accounting and Finance, 9(6), 1322 - 1331. DOI: 10.13189/ujaf.2021.090611.