Abstract
<pre>The objective of this study is empirically identify the impacts of Good Corporate Governance and capital structure on firm value with financial performance as intervening variable. We operate quantitative approach within the scope of manufacturing company of metal, chemical, and plastic packaging sector which listed in Indonesia Stock Exchange during the 2017-2018 periods as the population. Samples are chosen by purposive sampling method inwhich the company must report the financial statement in a row, obtained 79 observations. The data analysis technique used is financial ratio analysis to determine the condition of the business financial ratios of the variables studied. Data were analyzed using multiple linear regression analysis. The result shows that corporate governance and capital structure influence the firm value, moreover the use of institutional ownership ratio and capital structure will increase the value of the firm. The result also shows that the impact of Corporate governance and capital structure on the company value are mediated by financial performance. It means that the value of the firm can increase if the company able became an effective monitoring tool.</pre>
Highlights
Company value reflect the value of assets owned by the company and the higher the value of the firms, the company will have a better image. Brigham and Houston (2011) define agency theory as a relationship in which managers are given power by shareholders
Based on Miller and Modigliani (1961), Kim and Sorensen (1986), Fuerst and Kang (2000) we propose that there was a research gap that we should test and discuss, the hypothesis that we built is : H2: there is an influence of Corporate Governance and capital structure on firm value through financial performance as an intervening variable
Hypothesis testing in this study aims to see whether the form or implementation of good corporate governance and capital p-ISSN: 0854-1442 (Print) e-ISSN: 2503-4464 (Online) structure variables affect the firm's value with financial performance as an intervening variable
Summary
Company value reflect the value of assets owned by the company and the higher the value of the firms, the company will have a better image. Brigham and Houston (2011) define agency theory as a relationship in which managers are given power by shareholders. Brigham and Houston (2011) define agency theory as a relationship in which managers are given power by shareholders. Both of them are vulnerable to differences in interests that can cause agency problems. Susanti in Amanti (2012) states that Good Corporate Governance (i.e, GCG) can create added value because by implementing CGC, it is expected that the company will have good performance so as to create added value and increase the value of the company which can provide benefits for shareholders or company owner. The term corporate governance can be used to explain the role and behavior of the board of directors, the board of commissioners, the management of the company, and shareholders
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