Jornal de Economia Global

The Effect of Capital Structure, GCG, CSR, Firm's Size on Market Value through Earnings Per Share in Banking Sector

Abstract

Kahlil Fauzan and Dr. Adi Kuswanto

The objective of this research are to analyst the effect of capital structure, corporate governance, corporate social responsibility, firm’s size on earnings per share and to analyst the effect of earnings per share on market value. The subject of this research is the banking sector entities listed on the Indonesia Stock Exchange in the year 2008 and reported self-assessment of good corporate governance from the year 2008 up to 2015 also did not experience any losses resulting in earnings per share negative from the year 2008 up to 2015. The result shows that capital structure, good corporate governance, corporate social responsibility and firm’s size have influence on earnings per share. The relationship between capital structure with earnings per share inversely proportional. The relationship between the good corporate governance with earnings per share is directly proportional. The relationship between corporate social responsibility with earnings per share inversely proportional. The relationship between firm's size with earnings per share is directly proportional. Earnings per share have influence on market value. The relationship between earnings per share and market value is directly proportional. Earnings per share reflects the book value reported by the bank, the real value of the bank is the market value. It can be indicated that the capital market in Indonesia gives higher value to the bank due to the strength of bank income. If the bank has profits consistently will have a market value greater than the book value of the bank.