THE ROLE OF CORPORATE SOCIAL RESPONSIBILITY DICLOSURE IN MODERATING THE EFFECT OF CAPITAL STRUCTURE ON FIRM VALUE

ABSTRACT This study aims to prove empirically the effect of capital structure on firm value moderated by CSR disclosure. Signaling theory is used as the theoretical basis in this study. The population is all companies in the mining sector of Indonesia Stock Exchange during 2012- 2016. Sampling method uses is purposive sampling method. Hypotheses were tested with Moderated Regression Analysis (MRA) with a classical assumption test first. The result of the analysis shows that CSR disclosure variable is able to moderate the effect of capital structure on firm value. It means that more companies expose their social responsibility to the environment and society will further strengthen the interest of investors to invest in companies that are considered environmentally friendly and see CSR activities as a guide to assess the potential sustainability of a company, but when the company's capital structure where the proportion of debt more than its equity will be able to lower the firm value because investors judge the company is too risky financial difficulties. If the company's debt can be reduced then it can increase the firm value. KEY WORDS Capital structure, firm value, disclosure, signaling theory.