The influence of corporate social responsibility (CSR) disclosure on firm values with stakeholder reaction as the mediation variable

This study aims at evaluating CSR programs in Indonesia by examining the influence of CSR disclosure on firm values through the mediation of stakeholders' (customers and employees) reaction. This study applies an explanatory research approach and uses data of non-service corporations that were listed on the Indonesian Stock Exchange (IDX) from 2010 to 2012. Saturated sample technique is implemented to draw the sample and this study employs a structural equation modelling (variance-based). The implication of these results suggests that the government, as a regulator in the stock market, should provide a complete guide about how to make a good CSR report that refers to Global Reporting Initiative. Eventually this guidance could be used by stakeholders to make appropriate economic decisions. For companies, it is important to pay attention to CSR disclosure in the annual report or in the company's sustainability report because it is positively responded to by employees and investors.