Abstract:
This study aims to analyze and explain the relationship between the Corporate Social
Responsibility (CSR) and the Firm Value, either direct or indirect through the Corporate
Financial Performance (CFP) and the Firm Risk. The research object is the listed companies
in Ghana Stock Exchange for the period of 2014-2017. The CSR is measured from
information disclosure index based on Global Reporting Initiative (GRI) 3.1 reporting
standard. The Tobin’s Q and Price to Book Value (PBV) are used as the indicators of the Firm
Value. The CFP is determined from the Return on Assets (ROA) and the Return on Equity
(ROE). The Firm Risk is computed from the idiosyncratic risk. A Structural Equation
Modeling (SEM) is utilized to analyze the data. The results show that the CSR has no
significant effect to the Firm Value. In one side, the CSR has positive significant effect to the
CFP and the CFP has positive significant effect to the Firm Value. Further, the CSR has
positive significant effect to the Firm value through the CFP. In the other side, the CSR has
negative significant effect to the Firm Risk, and the Firm Risk has negative significant effect
to the Firm value. However, the CSR has no significant effect to the Firm Value through the
Firm Risk.
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