The Effect of Funding Policy, Investment Policy, and Dividend Policy on the Firm Value through Good Corporate Governance as an Intervening Variable: Case Study on Bank Subsector Companies Listed at Indonesia Stock Exchange

Abstract

The company’s main is maximizing the firm value which means it increase the shareholder prosperity. This can be achieved by combining funding policy, investment policy, and dividend policy optimally. The application of GCG is used to direct and control the company in order to be able to run the company’s operations in accordance with stakeholder’s expectations. This study aims to determine the influence of funding policies, investment policies and dividend policies on firm value by using GCG as a mediating variable. This study uses quantitative approach. In this study, the population are totalled 43 bank subsector companies which listed in the Stock Exchange in 2013-2017. The samples are taken by purposive sampling technique with 12 companies. The method of data analysis which use in this study were descriptive analysis, and path analysis using Partial Least Square (SmartPLS3). The result of the study shows that the investment policy has positive affect to firm value. The funding policy and dividend policy have no effect the firm value. While investment policy has positive affect to GCG. Furthermore, the funding policy and dividend policy have no effect on GCG. GCG successfully mediates the relationship of investment policy with the firm value. That is, the higher profitability will affect the GCG, so that it will affect the firm value. However, GCG as an intervening variable does not succeed in mediating the relationship of funding policy and dividend policy with the firm value.