Financial Performance and Dividend Policy to the Value of Company
in Corporate Social Responsibility Moderation
Supami Wahyu Setiyowati and Ati Retnasari
Faculty of Economics and Business, University of Kanjuruhan Malang, Jl. S.Supriyadi 48, Malang, Indonesia
Keywords: Financial Performance, Dividend Policy, Corporate Value, Corporate Social Responsibility.
Abstract: The purpose of this study is to examine the financial performance and dividend policy on corporate value in
corporate social responsibility moderation.
The method used is quantitative and correlational research
type.
Analytical technique used is Multiple Linear Regression. The results showed that the financial
performance and dividend policy significantly affect the value of the company.
Corporate social
responsibility is able to moderate the relationship of company performance to company value. Corporate
social responsibility is not proven to moderate the relationship of dividend policy to the value of
company.
This is because investors have not paid attention to the disclosure of corporate social
responsibility in deciding to invest in the company. Conclusion is the disclosure of corporate social
responsibility improves the relationship of financial performance with the company value. The research
implications of potential investors are expected to see disclosure of corporate social responsibility before
investing in the company.
1 INTRODUCTION
Financial performance and dividend policy affect on
corporate value in the moderation of corporate social
responsibility. Financial performance is a
fundamental assessment of the conditions that the
company has. The dividend policy is the company's
policy of sharing profits for shareholders. The
company’s values policy can be seen from the
company’s ability to pay dividends. There are times
when the dividends are not shared by the company
because the company feels the need to reinvest the
profits it earns. The dividend policy is a signal to
investors in assessing the good performance of a
company and a source of income for investors
(Khan, 2011). Companies that have implemented
Corporate Social Responsibility will make reporting
and disclosure of Corporate Social Responsibility in
addition to the financial statements. This is done
because the company wants the legitimacy and
positive value of the community.
Research on the financial performance of the
company’s value is done by Nawaiseh (2017)
examines the influence of financial performance on
the value of companies in Jordan. A research sample
of 40 companies on the AFM website. Research
period is 2006-2015. Data analysts used multiple
regression. The results showed that financial
performance has an effect on company
value. Gamayuni (2015) examines the effect of
financial performance on corporate value in
Indonesia. The population of companies that go
public on period of 2007-2009. The results showed
that the financial performance affected the value of
the company.
Ochieng (2016) examines the effect of dividend
policy on corporate value in Kenya. The results
showed that the dividend policy has a significant
effect on the value of the company. Samples of
research are 33 companies for 2011-2015 period and
multiple regression analyst tools. The results of
research conducted Amidu (2007) showed that the
dividend policy has a significant effect on the value
of the company.
The difference of this research with previous
research is the existence of corporate social
responsibility variable as moderation variable.
Corporate social responsibility is the company’s
commitment to improve the welfare of the
community through good business practices and
contribute some of the company’s resources (Kotler
and Nancy, 2005). This means a form of corporate
responsibility to a wider society and environment,
382
Setiyowati, S. and Retnasari, A.
Financial Performance and Dividend Policy to the Value of Company in Corporate Social Responsibility Moderation.
In Proceedings of the Annual Conference on Social Sciences and Humanities (ANCOSH 2018) - Revitalization of Local Wisdom in Global and Competitive Era, pages 382-385
ISBN: 978-989-758-343-8
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

covering economic, environmental and socio-
cultural aspects.
Problems in this study are: Does the financial
performance affect the value of the company? Does
dividend policy affect the value of the company? Is
corporate social responsibility capable of moderating
the financial performance of corporate value? Is
corporate social responsibility able to narrow
dividend policy to company value?
The purpose of this study to determine the effect
of financial performance on corporate value.
Influence of dividend policy on company value.
Influence of financial performance to corporate
value in moderation corporate social responsibility.
The influence of dividend policy on corporate value
in moderation corporate social responsibility.
2 RESEARCH METHOD
This research method is quantitative with the type of
correlation research. The purpose of correlation
research is to know the relationship and the level of
relationship between two or more variables.
2.1 Data
The data used in this study is secondary data taken
from the company’s annual report. Secondary data
was obtained from Investment Gallery of Faculty of
Economics and Business of Kanjuruhan University
and Indonesian Capital Market Directory
(ICMD). Samples of research are 33 manufacturing
companies.
2.2 Research Model
To analyze, Moderated Regression Analysis (MRA)
is used as follows:
Tobins Q = β0 + β1ROA + β2DPR + β3
CSRi*ROA + β4CSRi*DPR + e
(1)
Explanation: Tobins Q is the value of company.
ROA is used to calculate the financial performance.
DPR is used to calculate dividend policy. CSRi is a
CSR indeks.
3 RESULTS AND DISCUSSION
3.1 Classical Assumption Test
The normality test results indicate that the data
spreads around the diagonal line and follows the
direction of the diagonal line, so the regression
model meets the assumption of normality. The result
of multicollinearity test shows that VIF value around
1 and tolerance value close to 1, so it can be
concluded that there are no multicollinearity
symptoms among independent variables in the
regression model used. The result of
heteroscedasticity test shows that the scatterplot
image that the points are spread above and below
zero on the Y axis, so it can be concluded that there
is no problem of heteroscedasticity. The results of
the autocorrelation test indicate that the Durbin test
value is obtained, the Durbin Watson test value
(DW) is close to two or between (du) < DW< (4-du),
so there is no autocorrelation.
3.2 Hypothesis Testing
Decision-making for hypothesis testing uses
significance value with criterion if p value> 0,05,
then H0 accepted or Ha rejected, it means that
regression coefficient obtained is not influential and
if value p <0,05, then H0 refused or Ha accepted,
meaning the regression coefficient obtained is
influential.
3.2.1 Financial Performance Has an Effect
on Company Value
Financial performance within the company is
reflected by high return on Asset, hence the value of
company also will H1, in this research is to test
whether financial performance have an effect on
company value. The result of this research test
shows the t
count
of 3,249 with the probability
significance is 0.009 is lower than α = 5% or 0.05 so
that the results of this study support the hypothesis
(Ha1) proposed. This means financial performance
has a positive and significant impact on the value of
the company, or in other Ards, the greater the
financial performance then increasing the value of
the company. If it increases because the company’s
value is determined by earnings power of the
company’s assets. The higher the earning power the
more efficient the asset turnover and the higher the
profit margin obtained by the company.
The results of this study support the research
conducted by Nawaiseh (2017) and Gamayuni
Financial Performance and Dividend Policy to the Value of Company in Corporate Social Responsibility Moderation
383

(2015) that the financial performance affects the
company value. The financial performance in the
Company is reflected by high return on assets, the
company value will also increase because the
company’s value is determined by earnings power
from the company’s assets. The higher the earning
power the more efficient the asset turnover and the
higher the profit margin obtained by the company.
According to Brigham and Houston (2006) shows
that financial performance is one of the corporate
governance mechanisms that can increase the
company value. Financial performance enables
managers to strive to increase the value of their
wealth as a shareholder of the company, which
ultimately also increases the value of the company.
3.2.2 Dividend Policy has an Effect on
Company Value
The result of the research shows that there is an
effect on Dividend Policy to Company Value with t
value is equal to 2,903 and significant value 0,045 is
lower than α = 5% or 0,05. (H2) dividend policy
affects the value of the company received.
The results of this study support Nwamaka and
zeabasili (2017) and Ochieng (2016), (Amarjit et al.,
2010) and (Adesola and Okwong, 2009) that
dividend policy affects company value. The high
dividends paid to shareholders are related to the high
and low value of the company. Dividend policy is
the right of shareholders to get a portion of the
company’s profits. The company will disclose an
information if the information can increase the value
of the company. Based on the theory of signal
managers who have good information about the
company will try to convey the information to
outside investors. Information dividend is
information that can increase the company value.
3.2.3 Corporate Social Responsibility
Moderates the Relationship of
Financial Performance with the
Company Value
H3 in this study is to test whether the interaction of
financial performance with the disclosure of
corporate social responsibility is able to moderate
the relationship between financial performances with
the value of company. The results of this study
indicate the value of t count is 2,989 and its
probability significance is 0.033, which is lower than
α = 5% or 0.05. So this research supports hypothesis
(H3) proposed. This means that the interaction
variable of financial performance with corporate
social responsibility disclosure as a moderating
variable can affect the relationship of Financial
Performance to company value.
The disclosure of corporate social responsibility
is also in accordance with stakeholder theory, which
states that all stakeholders have the right to
information about the activities of the company that
can influence decision-making (Deegan, 2004). In
review of the agency theory with the disclosure of
corporate social responsibility, can reduce the
existence of agency problems emerged between the
management as manager with the owner of the
company. Disclosure of corporate social
responsibility suggests that the management is more
transparent in managing the company.
3.2.4 Corporate Social Responsibility
Moderates the Relationship of
Financial Dividend Policy and the
Company Value
H4 in this study is to test whether the interaction of
dividend policy with corporate social responsibility
disclosure is able to moderate the relationship
between financial performance and company value.
The results of this study show the value of t
count
of
1.631 and its probability significance is 0.53 which
is higher than α = 5% or 0.05. So this study does not
support the hypothesis (H4) proposed. This means
that the variable of dividend policy interaction with
corporate social responsibility disclosure as
moderating variable cannot affect the relationship of
dividend policy with company value.
The results show that CSR has not been able to
moderate the relationship of dividend policy and
company value. The disclosure of CRS has not been
able to benefit the relationship of dividend policy
and company value. This means that CSR disclosure
cannot have a significant impact on the relationship
of dividend policy with company value. Potential
investors have not seen corporate social
responsibility as the information used before
deciding to invest.
4 CONCLUSIONS
This study proves that the disclosure of corporate
social responsibility is able to moderate the
relationship of financial performance with company
value. The company will disclose an information if
the information can increase the value of the
company. CSR moderates the relationship of
ANCOSH 2018 - Annual Conference on Social Sciences and Humanities
384

financial performance to company value. Corporate
CSR rises, it will increase the value of a company.
5 IMPLICATIONS AND
SUGGESTIONS
The disclosure of corporate social responsibility has
not been seen as important information for
investment decision-making for investors and
potential investors. For further research it is better to
change the moderation variables. The goal is to get
different results.
ACKNOWLEDGMENT
The researcher would like to thank the University of
Kanjuruhan Malang for the facilities provided in this
research. Especially the faculty of economics and
business majoring in accounting.
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