The effect of profitability and bank size on firm value sustainability: The mediating role of capital structure

Linawati, Nanik; Moeljadi, M.; Djumahir,; Aisjah, Siti

doi:10.21511/imfi.19(2).2022.29

Cited by 7 publications

(14 citation statements)

References 47 publications

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“…On the other hand, there is conflicting research explains that profitability proxied by ROI, and ROE according to Sudrajat and Setiyawati (2021) explain that profitability proxied by ROI has a negative and significant effect on capital structure. It is in line with the results of research (Linawati et al, 2022), which shows that profitability proxied by ROI has a negative and significant effect on capital structure. This research is in line with the opinion of (Amin, 2021), which explains that the impact of profitability with ROI and ROE proxies on capital structure is negative and significant.…”

Section: Roi On Capital Structuresupporting

confidence: 91%

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Revealing the Capital Structure Factor Is Dominated by Debt to Lq45 Companies on the Indonesia Stock Exchange

Masidonda,

Hariyati,

Hariyanti

2023

JAM

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Capital structure has an important role that must be determined to improve the welfare of the owner or the value of the company. Many studies have been done before about capital structure. This study aims to analyze the effect of Chief Executive Officer (CEO) ability, return on investment, return on equity and profit margin on capital structure. This study includes a database outside of accounting data, namely CEO Ability. This is important to study to determine the ability of the CEO in providing internal sources of funds in the capital structure of LQ45 companies on the Jakarta Stock Exchange which are more dominated by debt. The method used is a mixed method between quantitative methods and qualitative methods. The quantitative method uses multiple linear regression analysis. While qualitative methods are used to analyze the influence based on the results of interviews. The object of research was conducted on 45 companies included in the LQ45 stock list on the Indonesia Stock Exchange with a sample of 31 companies. The reasons for selecting 31 samples: a) the company has been listed on the IDX during the 2017-2021 research period, b) has financial statements with non-negative retained earnings and equity. The results showed that CEO ability, profit margin, return on investment as a factor causing capital structure is dominated by debt, while return on equity has no effect on capital structure. The implication of this research is that CEOs who are less able to increase profits to meet the availability of internal funds, the company must meet funding needs sourced from debt through good net working with fund owners.

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Section: Roi On Capital Structuresupporting

confidence: 91%

“…Return on Investment (ROI) is the company's ability to generate profits that will be used to cover investment (Linawati et al, 2022).…”

Section: Figure Figure 4 Research Stagesmentioning

confidence: 99%

Revealing the Capital Structure Factor Is Dominated by Debt to Lq45 Companies on the Indonesia Stock Exchange

Masidonda,

Hariyati,

Hariyanti

2023

JAM

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“…The data used in this study is a combination of time series and cross-section data. Therefore, the appropriate analysis technique is panel data regression [49]. Firm Value FV Tobin's Q (𝑡ℎ𝑒 𝑒𝑞𝑢𝑖𝑡𝑦 𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒) /(𝑡ℎ𝑒 𝑒𝑞𝑢𝑖𝑡𝑦 𝑏𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒) [48] By conducting these three tests, the most suitable and appropriate panel data regression model can be determined to be used in the panel data regression analysis in this study.…”

Section: Methodsmentioning

confidence: 99%

Capital Structure, Financial Performance, and Macroeconomic Conditions: Evidence From Indonesia Stock Exchange

Febrianti,

Mustaruddin,

Afifah

2024

ajarcde

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his study aims to analyze the influence of capital structure, financial performance, and macroeconomic conditions on firm value (Tobin's Q) in companies included in the Kompas 100 index (100 companies with good liquidity and large market capitalization) listed on the Indonesia Stock Exchange between 2018 and 2022. A total of 50 companies with historical data for 5 years were analyzed amounting to 250 observational data. The data analysis method used is panel data regression analysis processed using Eviews software version 10. The results show that financial performance has a significant positive effect on firm value, and capital structure has a negative but not significant effect on firm value. Among the macroeconomic variables, inflation has a negative influence while interest rates have a positive influence, both of which are significant on firm value. However, GDP growth shows an influence that is not significant towards changes in firm value. The determinants of firm value are very complex thus each company needs to identify the key factors influencing them. It is recommended for further research to include corporate governance and firm growth variables.

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“…Another study shows that a bank's capital structure positively and significantly affects firm value. Conversely, if the capital structure is lower, the influence on firm value will be lower (Linawati, 2022).…”

Section: Introductionmentioning

confidence: 98%

The Impact of Capital Structure on Digital Bank Valuation in Indonesia

Avianto

Sembel²,

Manurung³

2022

JEFAS

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The restricted activities during Covid -19 pandemic encourage people to spend more on online activities. One of the most shift activities happened in the banking sector activities. The high demand for digital services encourages banks to accelerate the transformation and development of their mobile banking to be more advanced. One exciting thing about the development of digital banks in Indonesia is the phenomenon of the high valuation of digital banks compared to other conventional banks. This study will answer whether the corporate action taken by large companies to buy small banks and transform them into digital banks is a factor in the high valuation of these digital banks. Moreover, will the high valuation persist or move into the normal range of other banks? This study used a quantitative research method. The approach of research used is a regression statistic model. Based on the Hausman test of 3 models used in this research, the best model used to identify the result is the fixed-effect model. The result showed a negative correlation between DER and PBV which was used as the variable in this research. There are many problems found in the ancient test statistic. There is no multicollinearity, autocorrelation, and heteroskedasticity. So, the result of fixed-effect regression in this research showed the BLUE analysis result.

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The effect of profitability and bank size on firm value sustainability: The mediating role of capital structure

Cited by 7 publications

References 47 publications

Revealing the Capital Structure Factor Is Dominated by Debt to Lq45 Companies on the Indonesia Stock Exchange

Revealing the Capital Structure Factor Is Dominated by Debt to Lq45 Companies on the Indonesia Stock Exchange

Capital Structure, Financial Performance, and Macroeconomic Conditions: Evidence From Indonesia Stock Exchange

The Impact of Capital Structure on Digital Bank Valuation in Indonesia

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