Does Corporate Social Responsibility affect Firm Value? The mediating role of green innovation

The purpose of this study is to investigate the effects of corporate social responsibility on green process innovation, green product innovation, and firm value; the effects of green process innovation and green product innovation on firm value; and the mediating roles of green process innovation and green product innovation in the relationship between corporate social responsibility and firm value. The study is grounded in stakeholder theory and Resource-Based View theory.

This research uses purposive sampling in selecting the sample. The sample consists of manufacturing companies listed on the Indonesia Stock Exchange during 2018–2021. Eighteen companies met the sampling criteria. Data were collected through observation, and path analysis was used as the analytical technique.

The results show that corporate social responsibility has a positive but insignificant effect on green process innovation; a positive and significant effect on green product innovation; and a positive but insignificant effect on firm value. Green process innovation and green product innovation have positive and significant effects on firm value. Green process innovation does not mediate the effect of corporate social responsibility on firm value, whereas green product innovation mediates the effect of corporate social responsibility on firm value.