Firm Value Research Articles

Does disclosure of CSR activities improve corporate value? Moderating role of intellectual capital and COVID-19 pandemic

This paper investigates the effect of CSR on corporate value in conjunction with knowledge-based resources (i.e., intellectual capital - IC) and COVID-19 in the context of an emerging market in the Middle East. It also explores the moderating effects of IC and the COVID-19 pandemic on the nexus between CSR and firm value. Employing a 6-year longitudinal dataset of Saudi nonfinancial firms listed on the Stock Exchange (Tadawul) from 2016 to 2021 and applying a feasible generalised least squares estimation method, our results show a significant inverse relation between CSR and corporate value measures, while a positive (negative) relation between IC (COVID-19) and corporate value. We also find that both IC and COVID-19 have complementary moderating roles in amplifying the inverse nexus between CSR and corporate value. These findings are robust with alternative measures of CSR and IC, and endogeneity/simultaneity concerns, and provide valuable insights for companies, regulators, investors and stakeholders.

Relationship between advertising and firm value: Evidence from Jordan

Relationship between advertising and firm value: Evidence from Jordan

Quasi-Maximum Likelihood for Estimating Structural Models

Abstract The estimation of the structural model poses a major challenge because its underlying asset (the firm asset value) is not directly observable. We consider an extended structural model that accommodates alternative underlying Markov processes, arbitrary debt payment schedules, several seniority classes, multiple intangible assets, and various intangible corporate securities. We derive the likelihood function given the observed time series of the firm equity values. Then, we use dynamic programming to solve the model and, simultaneously, extract the associated time series of the firm asset values (the pseudo-observations). Finally, the likelihood function is approximated and optimized, which results in the quasi-maximum likelihood (QML) estimates of the model’s unknown parameters. QML is highly flexible and effective. To assess our construction, we perform an empirical investigation, highlight the credit-spread puzzle, and discuss a partial remedy via jumps and bankruptcy costs.

THE INFLUENCE ANALYSIS OF FINANCIAL RATIOS (SOLVENCY, PROFITABILITY, LIQUIDITY) ON THE VALUE OF BANKING COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE IN 2014-2018

Company value is the investor's perception of the level of company success, which is closely related to stock prices. High stock prices will increase firm value and market confidence, both in the company's current performance and its future prospects. This study aims to analyze the influence of profitability, liquidity, and solvency on firm value in banking companies listed on the Indonesia Stock Exchange (IDX) in the 2014-2018 period.This research uses a quantitative approach with a descriptive research type. The research sample consisted of 19 companies that met the specified criteria. The sampling method used was non-probability sampling with purposive sampling technique. Data were processed and statistically tested. The results showed that partially, the solvency variable had a negative effect on firm value. Meanwhile, profitability and liquidity had no effect on firm value. Simultaneously, the solvency, profitability, and liquidity variables also had no effect on firm value. This study indicates that the data distribution used as a reference in the study is likely not properly distributed. This is because some companies did not present complete financial statement items in the recapitulation of annual financial reports, which ultimately affected the processed data analysis. Keywords: Solvency, Profitability, Liquidity, Firm Value, Banking

PENGARUH LIKUIDITAS, PROFITABILITAS DAN UKURAN PERUSAHAAN TERHADAP NILAI PERUSAHAAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

The rapid economic growth has led to the emergence of many new business entities, which in turn intensifies competition across various industrial sectors. As a result, companies focus on enhancing their firm value to remain competitive. This study aims to determine whether liquidity, profitability, and firm size significantly affect firm value in manufacturing companies listed on the Indonesia Stock Exchange (IDX). The population studied consists of 19 manufacturing companies in the textile and garment sector listed on the IDX, with a relevant sample of 11 companies. The research method employed is quantitative data collection using documentation techniques, relying on annual financial statements accessed from the official IDX website for the period 2019 to 2023. The research findings show that liquidity has a negative and significant effect on firm value, profitability does not have a significant effect, and firm size has a positive and significant effect on firm value in manufacturing companies in the textile and garment sector listed on the IDX during the period 2019-2023

The Impact of Supply Chain Concentration on Firm Value - Based on the Mediating Effect of Green Technology Innovation

This paper constructs a fixed-effects panel model based on data from listed com-panies in heavy pollution industries in Shanghai and Shenzhen A-shares from 2013 to 2023, and empirically analyzes the impact of supply chain concen-tration on enterprise value and the intermediary role of green technology in-novation. The results show that, on the one hand, supply chain concentration significantly suppresses enterprise value, possibly due to the increased inter-nalization costs of environmental risks caused by excessive control over up-stream and downstream activities. On the other hand, green technology innova-tion plays a partial inter-mediary role between supply chain concentration and enterprise value, reducing costs through technological spillover and collabora-tive R&D, alleviating the neg-ative impact of concentration on enterprise value. Heterogeneity analysis reveals that non-state-owned enterprises are more sig-nificantly affected by supply chain concentration, while equity-independent firms face greater negative impacts, and non-equity-independent firms experi-ence smaller and insignificant effects. When optimizing supply chain concen-tration, companies should balance concentration with investment in green in-novation to enhance long-term competitiveness and sustainability

Digitalization and Firm Value: The Evidence from China’s Manufacturing Enterprises

Digitalization and Firm Value: The Evidence from China’s Manufacturing Enterprises

Firm (re)valuation and payouts

AbstractWe document an inverted‐U pattern in the frequency and magnitude of share repurchases across firms arranged into deciles (value to price), and a symmetric opposite pattern in equity issuances. These patterns cannot be explained by the market timing theory, which predicts monotonically increasing share repurchases or decreasing equity issuances across deciles. Instead, these patterns can be explained by Chen and Lambrecht (2021) theory that “cash cow” firms with a target negative net debt ratio decrease payouts to shareholders (or raise equity) after a positive revaluation of their assets captured by high ratios. We demonstrate that the hump‐shaped patterns are driven largely by such firms with negative net debt ratio and by “mature” firms with low asset growth consistent with corporate lifecycle theory.

The Impact of Technology Innovation Output on Firm Value of Technology Innovation SMEs in China

With the advent of the big data era, technological innovation has become the driving force behind the expansion of technology innovation SMEs. Where feasible, enterprises must rely on the development of technology innovation SMEs as soon as possible to strengthen their national power and achieve sustainable development. Understanding the relationship between technological innovation output and firm value is crucial for developing R&D budgets and guiding some strategic decisions of top managers in firms. This article research the impact of technological innovation output on the firm value of technology innovation SMEs, this study is based on the data from 2019 to 2023 of the listed enterprises in China's Science and Technology Innovation Board (STAR MARKET), and regression analyses are technological innovation outputs (Intangible assets and Patent) and firm value. It was found that technological innovation output has a negative effect on firm value. This effect is equally applicable to companies of different age of establishment, especially for companies with a shorter period of establishment; the negative effect is more prominent.

The influence of ESG, profitability, and leverage on firm value with tax avoidance as an intervening

This research aims to determine the influence of Environmental, Social Governance (ESG), profitability, and leverage on company value with tax avoidance as an intervening variable. The research method used is descriptive and verification. The sampling technique used is non-probability sampling with purposive sampling technique, so the samples used in this research are 80 annual reports of general manufacturing companies listed on the indonesia stock exchange (IDX) during 2018-2022. The data analysis technique used in this research is path analysis using Eviews 12. The research results show that Environmental, Social, Governance (ESG), profitability and leverage influence tax avoidance. Apart from that, the research results show that Environmental, Social, Governance (ESG), profitability, leverage and tax avoidance influence firm value. Meanwhile, based on indirect test results, it shows that there is an indirect influence of Environmental, Social Governance (ESG), profitability and leverage on firm value through tax avoidance.

Leveraging Environmental Regulation: How Green Innovation Moderates the Relationship Between Carbon Information Disclosure and Firm Value

As global concerns over climate change intensify, carbon information disclosure has emerged as a critical factor influencing firm value. However, the relationship between carbon information disclosure and firm value remains inconclusive in the existing literature, particularly within the context of China’s evolving environmental policies. This study investigates the impact of carbon information disclosure on firm value while examining the moderating role of green innovation and the moderating moderated effect of environmental regulation. Drawing on stakeholder theory, resource-based theory, and institutional theory, this study constructs a comprehensive research framework and employs panel data regression analysis on a sample of 1753 firm ten-year observations from A-share listed companies in China between 2013 and 2022. The results reveal that carbon information disclosure significantly enhances firm value, and green innovation positively moderates this relationship. Furthermore, environmental regulation strengthens the moderating effect of green innovation, acting as a leverage effect that amplifies the financial benefits of carbon information disclosure. These findings highlight the importance of integrating regulatory policies with corporate sustainability strategies. This study contributes to the literature by providing empirical evidence on the synergistic effects of carbon information disclosure, green innovation, and environmental regulation, offering insights for sustainable corporate development.

The Double Signal of ESG Reports: Readability, Growth, and Institutional Influence on Firm Value

The Double Signal of ESG Reports: Readability, Growth, and Institutional Influence on Firm Value

High-solids gel properties of acid-hydrolyzed waxy maize starch are determined by the molecular-weight distribution.

High-solids gel properties of acid-hydrolyzed waxy maize starch are determined by the molecular-weight distribution.

The Role of Intangible Assets in Shaping Firm Value

The Role of Intangible Assets in Shaping Firm Value

The Impact of Debt on Firm Value: An Analysis of the UK Market

This study examines the impact of debt on firm value within the UK stock market, focusing on the unique economic, regulatory, and market conditions of the region. Using a descriptive quantitative analysis and regression modeling, the research investigates the relationship between debt levels and firm valuation for publicly listed UK firms in 2023. The findings reveal that debt levels do not significantly influence firm value, aligning with the Modigliani-Miller Theorem, which posits that capital structure has a limited effect on firm valuation in perfect markets. The results suggest that other factors, such as profitability, firm size, and market conditions, play more substantial roles in shaping firm value. This research contributes to the understanding of debt's role in financial strategy and provides insights for investors and financial managers in assessing risk and making informed decisions.

Pengaruh Struktur Modal dan Pertumbuhan Aset terhadap Nilai Perusahaan dengan Profitabilitas sebagai Variabel Intervening pada Perusahaan Sektor Primer yang Terdaftar di BEI Periode 2019-2023

This study aims to see how far the influence of capital structure and asset growth has on firm value with profitability as an intervening variable on primer sector consumer non-cyclicals companies listed on the Indonesian stock exchange for the 2019-2023 period. The population in this study are all consumer non-cyclicals companies listed on the Indonesia Stock Exchange in 2019-2023, namely 129 companies. The sample selection technique used purposive sampling and obtained a sample of 32 samples. Methods of data analysis using multiple regression analysis and path analysis in SPSS 26. Based on the hypothesis testing that has been done, it is concluded that the: (1) capital structure have a significant effect on profitability, (2) Asset grwoth has no significant effect on profitability, (3) Capital structure has no significant effect on firm value, (4) Asset grwoth has no significant effect on firm value, (5) Profitability has a significant effect on company value, (6) capital structure has a significant effect on firm value through profitability has an intervening variable, (7) Asset growth has no significant effect on company value through profitability as an intervening variable.

The Assessment of Enterprise Risk Management Practices of Ethiopian Commercial Banks

The study aims to examine the enterprise risk management (ERM) practices of Ethiopian commercial banks. This approach is undertaken to examine the current approach to enterprise risk management within the Ethiopian banking context. A mixed-methods research design is employed which comprises content analysis and a survey study. The study found that the prevailing emphasis of risk management functions in Ethiopian commercial banks revolves on ensuring compliance with regulatory reporting standards. A significant number of the banks have implemented ERM programs primarily to meet regulatory obligations, rather than leveraging ERM to generate firm value. The study identified several gaps in the risk management function of Ethiopian commercial banks, including lack of integration of risk management with the banks’ mission and core values, failure to assess the resources required for effective risk management and to prioritise resource allocation accordingly, inadequate coverage of relevant activities and functional areas by both risk management and internal audit activities, and limitations on the assignment of chief risk officers (CROs) to oversee the risk management function within the banks. Overall, the maturity level of ERM implementation among Ethiopian commercial banks is moderate and requires further enhancement.

Do changes in the implied volatility of stock options predict future changes in CDS spreads?

This study examines whether changes in the implied volatility of stock options have cross-sectional predictability for future changes in credit default swap (CDS) spreads in the Korean market. The major findings are as follows. First, in the CDS portfolio analysis, when buying a portfolio with the highest increases in implied volatility and selling a portfolio with the highest decreases and rebalancing monthly, the average change in future CDS spreads is positive and statistically significant. Second, the cross-sectional predictive regression analysis shows that the coefficients for changes in implied volatility are significant in most models. The magnitude of the coefficients remains generally stable regardless of the control variables. These findings provide further evidence supporting the perspective of Cao et al. (2023) that increases in implied volatility reflect information about increased default risk due to higher firm value volatility.

The Mediating Role of Dividend Policy in the Influence of Profitability on Firm Value

This study aims to empirically test the effect of profitability on firm value through dividend policy as an intervening variable in raw material sector companies listed on the Indonesia Stock Exchange for the period 2013-2023. The study was conducted because there was a business phenomenon in the research topic, inconsistency of empirical data calculation results with theoretical studies, and inconsistency of previous studies that caused a research gap. The research topic is Firm Value which reflects the present value of expected future income. The dividend policy variable is proxied using the Dividend Payout Ratio (DPR). Profitability is proxied by Return on Assets (ROA), and Firm Value using Price to Book Value (PBV). This research is a type of quantitative research with data collection techniques using documentation techniques derived from the company's financial statements. The research population is a raw material industry sector company with a research period of 11 years. The data analysis technique used in the study is Panel Data Regression and Sobel Test using the Eviews version 12 application with the processed data in the form of panel data. The study shows that profitability does not have a significant effect on firm value, but dividend policy has a negative and significant effect on firm value. The dividend policy variable has a positive and significant effect on firm value. Then, dividend policy is able to mediate the influence of profitability on company value.

The Effect Of Tax Planning, Tax Avoidance, Tax Aggressiveness, and Deferred Tax Expense on Firm Value

This research aims to empirically examine the influence of tax planning, tax avoidance, tax aggressiveness, and deferred tax expense on firm value. The population used in this study comprises LQ-45 companies listed on the Indonesia Stock Exchange from 2019 to 2023. Using purposive sampling method, a sample of 18 companies was selected, with 90 company observations derived from financial reports. Data analysis was conducted using multiple linear regression analysis with SPSS 30 as the analytical tool. The research findings indicate that partially, tax planning, tax aggressiveness, and deferred tax expense have an impact on firm value. Meanwhile, tax avoidance does not have a significant influence on firm value. Furthermore, based on the F statistical test, tax planning, tax avoidance, tax aggressiveness, and deferred tax expense simultaneously have an influence on firm value.