Islamic social reporting mediates the effect of profitability and leverage on firm value

This study examines the effects of profitability, leverage, and Islamic social reporting (ISR) on firm value. This study uses explanatory research with a quantitative approach. The population in this study is all companies from the basic and chemical industry sectors listed on the Indonesian Syariah...

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Bibliographic Details
Published in:International Journal of Research in Business and Social Science 2023-01, Vol.12 (3), p.1-9
Main Authors: Putri Soleha Kusumasari, Ari, Aisjah, Siti, Ratnawati, Kusuma
Format: Article
Language:English
Subjects:
Capital markets
Chemical industry
Companies
Corporate profits
Debt financing
Investments
Islam
Leverage
Path analysis
Profitability
Sampling
Securities markets
Stakeholders
Stock exchanges
Stockholders
Value
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Summary:This study examines the effects of profitability, leverage, and Islamic social reporting (ISR) on firm value. This study uses explanatory research with a quantitative approach. The population in this study is all companies from the basic and chemical industry sectors listed on the Indonesian Syariah Stock Index in consecutive years reporting financial statements for 2017–2021. Saturated sampling is selected as the sampling method, and documentation is used to collect data. The data were analyzed using path analysis with the help of IBM-SPPS-21. The results showed that profitability significantly affects firm value, while leverage does not significantly affect firm value. Profitability significantly affects ISR reporting, whereas influence does not affect ISR reporting. ISR reporting can increase the value of a company. ISR reporting can mediate the relationship between profitability and firm value. However, ISR reporting cannot mediate the impact of leverage on firm value. The findings of this study suggest that to maximize returns, it is necessary to pay attention to the company's profitability, the proportion of leverage used, and the company's ISR reporting.
ISSN:2147-4478
2147-4478
DOI:10.20525/ijrbs.v12i3.2520