Moderating effect of firm performance on firm value: Evidence from Indonesia
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Received May 8, 2021;Accepted July 13, 2021;Published August 5, 2021
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Author(s)Link to ORCID Index: https://orcid.org/0000-0003-4308-7612Link to ORCID Index: https://orcid.org/0000-0002-6428-3615Link to ORCID Index: https://orcid.org/0000-0001-5076-0102Link to ORCID Index: https://orcid.org/0000-0001-7733-1586
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DOIhttp://dx.doi.org/10.21511/ppm.19(3).2021.08
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Article InfoVolume 19 2021, Issue #3, pp. 85-94
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Cited by3 articlesJournal title: Investment Management and Financial InnovationsArticle title: The relationship between capital structure, firm performance and a firm’s market competitiveness: Evidence from IndonesiaDOI: 10.21511/imfi.20(1).2023.09Volume: 20 / Issue: 1 / First page: 88 / Year: 2023Contributors: Andi Kartika, Moch Irsad, Mulyobudi Setiawan, Bambang SudiyatnoJournal title: Banks and Bank SystemsArticle title: Factors influencing commercial bank profitability in Iraq: A quantile regression approachDOI: 10.21511/bbs.19(2).2024.14Volume: 19 / Issue: 2 / First page: 172 / Year: 2024Contributors: Hatem Hatef Abdulkadhim Altaee, Naz Hiwa Ghani, Saya Jamal Azeez, Sameer Abduljabbar AbdulwahabJournal title: Banks and Bank SystemsArticle title: The role of corporate social responsibility as a moderating factor in influencing bank performance in IndonesiaDOI: 10.21511/bbs.19(1).2024.01Volume: 19 / Issue: 1 / First page: 1 / Year: 2023Contributors: Bambang Sudiyatno, Batara Daniel Bagana, Widhian Hardiyanti, Elen Puspitasari, Siska Dwi Safitri
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The practice of accounting conservatism, determination of capital structure, and firm performance are important elements in influencing firm value, either directly or through moderation. Firm performance as a reflection of company`s policy plays an important role as a variable that can moderate this influence. Thus, this study aims to examine the role of firm performance in influencing firm value, particularly in moderating the effect of accounting conservatism and capital structure. To test this role, managerial ownership and institutional ownership are viewed as control variables. A total of 43 manufacturing companies from the Indonesia Stock Exchange (IDX) were sampled from 153 manufacturing companies listed from 2017 to 2019 to achieve this target. The data collection approach in this study was purposive sampling, and the data analysis method was multiple regression. The results showed a statistically significant positive effect between accounting conservatism and firm value, while the capital structure had no statistically significant effect. Firm performance acts as a moderating variable of accounting conservatism and capital structure in influencing firm value. The results of this study also confirm that managerial ownership and institutional ownership do not function as control variables in controlling the effect of accounting conservatism and capital structure on firm value. Whereas managerial and institutional ownership is expected to encourage managers to carry out policies that are oriented towards increasing the firm value.
Acknowledgment
This paper is an independent study that is not funded by any institution. We would like to thank all those who have provided immaterial support for the implementation of this study.
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JEL Classification (Paper profile tab)G32, G34, M41
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References36
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Tables3
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Figures0
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- Table 1. Variable used in the analysis
- Table 2. Descriptive statistics
- Table 3. Results of the regression analysis
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Data curation
Ida Nurhayati
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Methodology
Ida Nurhayati, Robertus Basiya
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Validation
Ida Nurhayati, Bambang Sudiyatno
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Writing – original draft
Ida Nurhayati
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Conceptualization
Bambang Sudiyatno
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Formal Analysis
Bambang Sudiyatno, Elen Puspitasari
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Investigation
Bambang Sudiyatno, Elen Puspitasari
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Supervision
Elen Puspitasari
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Software
Robertus Basiya
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Visualization
Robertus Basiya
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Writing – review & editing
Robertus Basiya
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Data curation
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Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan
Ashraf Mohammad Salem Alrjoub , Muhannad Akram Ahmad doi: http://dx.doi.org/10.21511/imfi.14(3).2017.01Investment Management and Financial Innovations Volume 14, 2017 Issue #3 pp. 4-14 Views: 2808 Downloads: 2062 TO CITE АНОТАЦІЯSeveral studies have examined the relationship between inventory management and firm performance. However, most of these studies ignore the impact of inventory types on the relationship. Moreover, the relationship is influenced by some factors such as cost of capital which has not been considered. This study examines the moderating effect of cost of capital on the relationship between inventory types and firm performance. The data of 48 firms for the period 2010-2016 which formed 279 firm-year observations were used in this study. With the use of Pearson correlation and panel Generalized Method of Moments (GMM) estimation, the findings show that inventory management with consideration of its types influence firm performance in the long term. In addition, it is also found that cost of capital moderates the relationship between inventory management and firm performance. However, the interaction between cost of capital and inventory types has different implications. It is suggested that firms should consider cost of capital when making decision on inventory types and align their inventory control to fit in to the changes in their business environment.
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Corporate governance and firm performance in the Saudi banking industry
Ahmed Almoneef , Durga Prasad Samontaray doi: http://dx.doi.org/10.21511/bbs.14(1).2019.13Banks and Bank Systems Volume 14, 2019 Issue #1 pp. 147-158 Views: 2596 Downloads: 557 TO CITE АНОТАЦІЯThe current research aims to explore the impact of corporate governance on the Saudi banking performance for the period of 2014–2017. Though many researchers tested the relationship of corporate governance and firm performance, globally as well as in Saudi Arabia, however, during the literature review, it was found that many excluded the banking industry. This study tries to fill the gap by looking exclusively at the Saudi banking industry. Firm performance is measured through return on assets, return on equity, and Tobin’s Q as the dependent variables. The corporate governance practices are measured through the board characteristics (size, meeting, number of committees, independence, foreign board membership), and an audit committee (size, meeting, independence) as the independent variables. Firm size and firm age are the controls. Panel data analysis was implemented, using both descriptive and multivariate analysis through multiple regression to investigate the governance practices and firm performance. The empirical findings demonstrate that board size, audit committee meeting and bank size have a positive impact on ROE, whereas board independence has a negative impact on ROE. Similarly, board size and bank size have a positive relationship with ROA and board meeting has a negative relationship with ROA. Further, board (size and independence) and bank size have a positive relationship with Tobin’s Q, whereas number of board committees and bank age have a negative relationship with Tobin’s Q. Finally, audit committee (size and independence) and foreign board membership have no impact on the bank performance.
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Determinants of profitability in Jordanian services companies
Investment Management and Financial Innovations Volume 17, 2020 Issue #1 pp. 277-290 Views: 2383 Downloads: 413 TO CITE АНОТАЦІЯDue to the uniqueness of the services sector in terms of its characteristics and profitability, as well as the lack of studies on this sector, this study is considered to be the first to improve the knowledge of the key factors that play an important role in the profitability of the Jordanian services sector. This study investigates the effect of financial characteristics and capital structure on the profitability of all 46 services companies listed on the Amman Stock Exchange over the period 2014–2018. This study applies fixed and random effects models to panel data variables, namely, size, tangible assets, growth, business risk, debt to equity ratio and debt to assets ratio as independent variables. At the same time, profitability was measured by operating profits (earnings before interest and tax divided by total assets), return on assets (ROA), and return on equity (ROE), which acted as the dependent variables. This study reveals the first evidence that the debt to assets ratio has a negative and significant impact on the profitability of services companies in Jordan. In line with the pecking order theory, this finding suggests that more profitable services companies tend to prioritize the use of retained earnings in financing business activities rather than in financing debt. This study shows that profitability is significantly and positively affected by size and business risk, while ROA is negatively affected by business risk. It also shows that tangible assets have a negative and significant effect on profitability, while growth has a positive and significant effect on operating profits.