Factors influencing investor confidence and firm value

Abstract

This study examines the impact of corporate social responsibility (CSR), financial performance, environmental performance, dividend policy, and firm size on investor confidence and firm value. The research uses an explanatory approach to clarify the relationships between these independent and dependent variables through rigorous hypothesis testing. The study focuses on all manufacturing companies listed on the Indonesia Stock Exchange from 2017 to 2021, with a purposive sampling method selecting 20 companies for analysis. Data collection includes descriptive statistics, classical assumption tests, and path analysis. The results show that CSR, financial performance, and firm size significantly influence investor confidence, while environmental performance and dividend policy do not. Financial performance affects firm value, but CSR, environmental performance, dividend policy, firm size, and investor confidence do not significantly impact firm value. This research contributes new insights to academic and practical fields, highlighting that signals companies send through financial performance, CSR, and firm size can influence investor trust. However, financial factors have a greater impact on firm value than non-financial factors like CSR or environmental performance. Future research could explore factors such as organizational culture or industry differences that may explain why environmental performance and dividend policy do not significantly affect investor confidence or firm value, as well as the varying impact of CSR across different sectors.