The Effect of Dividend Policy, Investment Decision, Leverage, Profitability, and Firm Size on  Firm Value

Bon, Sergius Fribontius; Hartoko, Sri

doi:10.24018/ejbmr.2022.7.3.1405

Cited by 33 publications

(52 citation statements)

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“…This result contradicts the signal theory which shows that investment decisions send a positive signal to firm value. The outcomes of this study are in line with the results of research conducted by Anam & Nurhidayaini (2022) Jannah & Ariani (2022) and Bon & Hartoko (2022) which state that investment decisions have no significant effect on firm value.…”

Section: Discussionsupporting

confidence: 90%

“…Investment decisions have been considered in accordance with the funds owned, it will provide benefits that will increase the value of the company. The results of the same study were also carried out by Sulistiyo (2021) and Bon & Hartoko (2022) which stated that the weighted average cost of capital had a significant effect on firm value.…”

Section: Effect Of Cost Of Capital On Firm Valuementioning

confidence: 76%

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The effect of investment and financing decision, dividend policy and cost of capital on Indonesian firm value

Hariyanur

Septiyanti

Idris

2022

AJEBM

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This study aims to determine whether there is a relationship between investment decisions, funding decisions, dividend policies and the cost of capital with firm value. Business developments in the current era have made very significant progress which has made the competition increasingly fierce so that companies are required to be able to compete in order to survive and achieve company goals. To reduce errors in making decisions, companies need to pay attention to factors that can affect the value of the company. However, this topic is still being debated because some previous research results have different results. This study uses secondary data with a population of companies in the consumer goods industry sector and the agricultural industry sector listed on the Indonesia Stock Exchange from 2011 to 2020, the data obtained through the documentation method. The method used is purposive sampling and multiple linear regression analysis to determine the effect of the independent variable on one dependent variable that has a positive or negative relationship. The results showed that investment decisions, funding decisions, dividend policy and the cost of capital simultaneously have a significant effect on firm value. Partially, investment decisions and funding decisions have no significant effect on firm value, while dividend policy has a significant negative effect and the cost of capital has a significant positive effect on firm value. This finding shows that, in contrast to investment and funding decisions, which have not been able to directly or indirectly increase firm value, financial decisions involving dividend policies and the cost of capital can help companies achieve their longterm goals which are expected to be used as information material in decision making invest. The limitation of this research is that the sample used is only companies in the consumer goods industry and agriculture listed on BEI so that the results of the study cannot be generalized. it is recommended to use samples other than the two sectors so that the research results can be generalized, so as to provide more appropriate and comprehensive research results.

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Section: Discussionsupporting

confidence: 90%

Section: Effect Of Cost Of Capital On Firm Valuementioning

confidence: 76%

The effect of investment and financing decision, dividend policy and cost of capital on Indonesian firm value

Hariyanur

Septiyanti

Idris

2022

AJEBM

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“…These findings are also established in the bank‐specific cases of Access Bank, First Bank, Zenith Bank, United Bank for Africa, ECObank, First City Monument Bank, Union Bank, Citi Bank, and Unity Bank. These research outcomes are in tandem with the findings of Bon and Hartoko (2022), Ojeyinka and Akinlo (2021), Inyiama and Victoria (2014), and Girardone et al (2004), which report evidence of no causality between size and firm performance. Meanwhile, it stands incongruent with the research outcomes of studies such as Ayetigbo and Okunlola (2022), Akinyemi and Adaramola (2018), Olaniyi, Olayemi, et al (2017), Bolarinwa and Obembe (2017), and Akinlo (2012b), which establish a bidirectional causal link between firm size and profitability.…”

Section: Presentation and Discussion Of Findingssupporting

confidence: 79%

Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus

Olaniyi

Al‐Faryan

2022

Manage Decis Econ

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This study examines the roles of interdependence and policy variations across firms in the causality between bank size and profitability in Nigeria, using secondgeneration estimators and the Dumitrescu-Hurlin panel Granger non-causality test.The findings support different business strategies and policy variances across banks.Causality is found non-existent in the cases of 11 banks. A unidirectional causality from size to profitability is established in two banks while evidence of a unidirectional causality is established from profitability to bank size in the other two banks. This study concludes that cross-sectional dependence and policy variations across firms matter in the bank size-profitability nexus.

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“…This is different from the findings of the panel of researchers who found that investment decisions did not give a signal to firm value, such as the findings of Triani and Tarmidi (2020) that investment decisions in the property and real estate group of companies on the Indonesia Stock Exchange did not give a signal to firm value. Other findings by Komala et al (2019) and Bon and Hartoko (2022) found something similar but in the manufacturing sector companies.…”

Section: Introductionsupporting

confidence: 66%

Investment Decisions of Energy Sector Companies on the Indonesia Stock Exchange: Theory and Evidence

Alghifari¹,

Gunardi

Suteja

et al. 2022

IJEEP

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This paper focused on strategic corporate financial decisions regarding investments to increase firm value moderated by profitability in emerging markets. The analytical method used was panel data analysis, with a total number of observations of 260 energy sector companies on the Indonesia Stock Exchange in 2019-2021. The results of the Chow Test, Hausman Test, and Lagrange Multiplier Test show the selected random effect model. The model shows that there is an effect of investment decisions on firm value in a positive direction and the moderating role of profitability strengthens this effect. The results of the robustness check show that the research model is still consistent with previous findings. Investment decisions have an effect on firm value, and profitability moderates this effect, both in the assumption of changes in control variables or model estimation using quantile regression. Our findings are in line with the idea of signaling theory that information on the company’s investment decisions is a positive signal that the company has good growth opportunities or prospects so that it will increase the firm value and ultimately have an impact on the prosperity of shareholders. Furthermore, profitability strengthens the positive signal of the company’s reputation in the eyes of investors.

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The Effect of Dividend Policy, Investment Decision, Leverage, Profitability, and Firm Size on Firm Value

Cited by 33 publications

References 0 publications

The effect of investment and financing decision, dividend policy and cost of capital on Indonesian firm value

The effect of investment and financing decision, dividend policy and cost of capital on Indonesian firm value

Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus

Investment Decisions of Energy Sector Companies on the Indonesia Stock Exchange: Theory and Evidence

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