The effect of risk and return on digitalization, corporate social responsibility and firm value of banking companies in Indonesia

This study aims to analyze the effect of risk and return on digitalization, corporate social responsibility (CSR) and firm value in banking companies listed on the Indonesia Stock Exchange. The study used annual data from banking companies listed on the Indonesia Stock Exchange with an observation period of four years so that a total of 172 observations were obtained. Data analysis using Structural Equation Modeling–Partial Least Square. The results of the data analysis show that in the 2019-2022 period the trend of risks faced by banking companies has increased, followed by the trend of returns for banking companies which have also increased, this is the impact of the Covid-19 pandemic. This proves high risk high return. Risk has a significant effect with a negative relationship to digitalization and an insignificant effect on corporate social responsibility, while return has a significant effect with a positive relationship to corporate social responsibility and does not have a significant effect on digitalization. Corporate social responsibility has a significant effect on the direction of a positive relationship to firm value with a positive relationship direction, while digitalization has no significant effect on firm value. This means that disclosure of information by banking companies gives a positive signal.