Firm Value Research Articles

Factors affecting corporate cash holdings: Evidence from the energy sector of Saudi Arabia

This study investigates the impact of firm-specific components of cash holdings on the cash reserves of energy firms. Decisions related to cash management are significant and treated as confident made by financial managers to increase the value of a firm. Therefore, financial managers are obligated to hold an optimum level of cash to enhance the firm value. The study depends on secondary data from seven energy firms listed on the Saudi Arabian Stock Exchange over the period between 2014 and 2023. The study considers cash holdings as a dependent variable, leverage, networking capital, and profitability as explanatory variables, and firm size as a control variable. The study employed a linear regression model and a generalized linear regression (GLM) model with Gaussian and Gamma distributions to analyze the data. The results show that Saudi Arabian energy firms reserve approximately 7% of cash, while external financing is 51%. The pooled regression results show that the association between leverage and firms’ cash reserves was negative (–0.064) and significant at less than a 1% significance level. Further, the networking capital and profitability were positively related (0.063 and 0.113) and significant at 5% and 1% significance levels. Moreover, the firm size was positive but insignificant. The generalized linear regression model results with Gaussian and Gamma distributions were similar to the simple linear regression with minor variation. AcknowledgmentThis current project under research project number PSAU/2023/02/25767 was funded by Prince Sattam Bin Abdulaziz University.

Earnings Volatility and Research and Development Investment Plan on Firm Valuation in the Philippine E=Commerce Sector

Earnings Volatility and Research and Development Investment Plan on Firm Valuation in the Philippine E=Commerce Sector

ESG and firm value: A hybrid literature review on cost of capital implications from Scopus database

AbstractThe relationship between ESG and firm value has been a relevant subject of study in recent years. We conducted a hybrid literature review to understand the literature's findings on this relationship and its implications in terms of cost of capital. First, a keyword co‐occurrence analysis on a 122 ABS ranked journals articles selection from Scopus database was adopted to identify and investigate the main research fields of the current literature. Then a content analysis through the bibliographic coupling of the most globally cited contributions was made, defining a final sample of 50 articles obtained through a minimum threshold of at least 15 total global citations (TGCs). We found that studies on the cost of debt configuration are more aimed at determining the implications on firm value, while most contributions on the cost of equity focus on the assessment of the risk–return profile for the investor or the construction of an ESG portfolio. Furthermore, we found that most of the literature has a consensus view on the lack of transparency behind the ESG ratings and their construction methodology, stating that disagreement on ESG ratings not only limits the results of empirical analysis, but can also negatively affect firm value due to a higher level of uncertainty.

The Influence of Corporate Governance, Leverage, and Environmental Performance on Firm Value

The Influence of Corporate Governance, Leverage, and Environmental Performance on Firm Value

The impact of financial feedback on the innovative activity of companies: the moderating role of corporate governance quality

ABSTRACT This research analyzes performance feedback and corporate innovative activity in the context of corporate governance quality. The research goal is as follows: to examine the influence of social and historical performance feedback on R&D intensity of a firm, and to determine whether governance quality strengthens interconnection between performance feedback and R&D intensity. The sample consists of panel data on 283 South-Eastern Asian public companies from the manufacturing industry sector. The sample covers seven countries during the time period from 2015 to 2020, providing 1698 firm-year observations. It was discovered that sample firms are sensitive to positive and negative social performance feedback and do not respond to historical feedback. A comparative analysis between types of feedback has shown that firms value social feedback more than historical feedback. It was also established that higher corporate governance quality decreases performance feedback sensitivity among firms, which weakens the relationship between the feedback and innovative activity. Firms with weak governance systems value social performance feedback more than companies with mature governance. The study of these types of feedback in combination with the quality of corporate governance can be used by company executives in corporate strategic planning and operational decision-making. CEOs should be ready to use performance feedback information in addition to their personal judgment.

Determinants of voluntary carbon emission disclosure: Does it affect firm value?

Determinants of voluntary carbon emission disclosure: Does it affect firm value?

Corporate culture and carbon emission performance

Using a large sample of U.S. firms from 2002 to 2020, we investigate the relationship between corporate culture and the extent of carbon emissions. We provide evidence that the quantum of carbon emissions is negatively associated with corporate cultural attributes manifested by integrity, teamwork, innovation, and respect. These results hold after controlling for potential endogeneity issues using several identification techniques. We also document that the negative culture–emissions relationship is magnified in firms with weak corporate governance and in those operating in environmentally sensitive industries. Additionally, this relationship is less salient in the presence of social capital. Finally, we demonstrate that in firms with a stronger culture, elevated carbon emissions result in a lower firm value. Our findings may be of interest to environmental regulators and management in their pursuit of firm-level carbon emission targets.

MODERASI KEBIJAKAN DIVIDEN DALAM MEMPENGARUHI PROFITABILITAS DAN LIKUIDITAS DALAM MENINGKATKAN NILAI PERUSAHAAN PADA PERUSAHAAN LQ45 YANG TERDAFTAR DI BEI TAHUN 2019-2022

The ultimate goal desired and achieved by a company is to obtain the maximum profit (profit) because to maintain the survival of a company. Profitability has many benefits, especially not only for company owners but also for parties outside the company. The purpose of this study was to determine the effect of dividend policy in moderating profitability and liquidity on firm value. The sampling technique used in this research is Purposive Sampling. The population in this study were LQ45 companies listed on the IDX in 2019-2022. Data analysis and hypothesis testing in this study used the Structural Equation Model - Partial Least Square (PLS-SEM). The results of direct influence hypothesis testing using the Smart PLS 3.0 application, show that Profitability has a negative but insignificant effect on Firm Value, Liquidity has a negative but insignificant effect on Firm Value, Dividend policy positively but insignificantly moderates (weakens) the effect of Profitability on Firm Value, Dividend policy positively but insignificantly moderates (weakens) the effect of Liquidity on Firm Value.

The Effect of Eco-Efficiency and Eco-Innovation Disclosure on Firm Value: Does Profitability Matter?

This research aims to test whether profitability strengthens the influence of eco innovation and eco efficiency disclosures on the value of mining sector companies listed on the Indonesia Stock Exchange. Research data was obtained from annual reports and sustainability reports from the Indonesian Stock Exchange website and company websites. The sample used was 39 companies that met the criteria and were listed on the Indonesia Stock Exchange in 2018 – 2021. The sample data calculation technique used the cross sectional method via the eviews application. Hypothesis testing in this research uses multiple linear regression analysis methods. The results of this research show that eco innovation and eco efficiency have a positive effect on firm value, and profitability has an effect as a moderating predictor variable in the relationship between eco innovation and eco efficiency on firm value. This study differentiates samples based on more diverse dependent variables and involves moderating variables as amplifiers. Previous research did not use the two dependent variables, namely eco innovation and eco efficiency simultaneously so that the value of the company could not be determined as a whole whether the implementation of both had an effect on the value of the company. Then the researchers found that investors considered the application of eco innovation and eco efficiency to the value of mining sector companies.

Substitutive effects of accounting transparency and corporate governance on firm value

Recently, there has been increasing emphasis on the importance of accounting transparency and corporate governance. While previous studies have individually examined their impact on firm values, this paper investigates their combined effects. Using data from the Compustat and Center for Research in Security Prices databases obtained through Wharton Research Data Services, we measure accounting transparency and company value, and we employ the E-index as a measure of corporate governance. This study conducts firm, year, and industry fixed effects regressions on a large panel dataset comprising 21,476 firm-year observations. According to our research, both accounting transparency and good corporate governance have negative effects on the value of a company. This means that spending money to improve both may end up costing more than it benefits, which could lower the value of the company. These results support the notion that investors may see that maintaining high levels of accounting transparency and corporate governance can be excessively costly, while an overemphasis on these two metrics could potentially limit the flexibility and creativity of management. These findings have implications for managers tasked with achieving a balance between robust corporate governance, enhanced accounting transparency, and corporate value considerations.

Corporate Social Responsibility Moderates the Relationship of Good Corporate Governance to Company Value

This study was conducted to test and analyse the effect of Corporate Social Responsibility in moderating the relationship between Good Corporate Governance and Firm Value. Good Corporate Governance in this study is proxied by Managerial Ownership, Board of Commissioners, and Audit Committee and Company Value measured by Tobin's Q. The population in this study are energy sector companies listed on the Indonesia Stock Exchange in the 2018 - 2022 period. The sampling technique used in this study was purposive sampling, obtained 10 samples of energy sector companies selected in accordance with predetermined criteria during the five-year period, thus obtaining 50 research observation data. The data analysis used uses panel data regression using the Eviews 12 testing application. The results showed that simultaneously managerial ownership, board of commissioners, and audit committee affect firm value. Based on the results of this study, it states that managerial ownership has a negative effect on firm value. The board of commissioners has no effect on firm value. The audit committee has no effect on firm value. Corporate social responsibility is unable to moderate managerial ownership, the board of commissioners and the audit committee on firm value.

Struktur Modal Dan Profitabilitas Pada Nilai Perusahaan Bidang Jasa Sektor Perbankan

This research aims to investigate the influence of capital structure on firm value in banking companies listed on the Indonesia Stock Exchange (IDX) during the period 2018-2021. Additionally, it seeks to examine the impact of profitability on firm value in these banking companies for the period 2018-2021. The research utilizes an explanatory research design, and data is sourced from the IDX website covering the years 2018-2021. Data analysis involves ratio analysis and multiple linear regression analysis using SPSS 25. The findings reveal that capital structure, measured by debt to asset ratio and debt to equity ratio, shows a positive and significant influence on firm value (PBV), with the latter being the more impactful. Profitability, measured by return on assets and return on equity, indicates that only return on equity has a positive and significant effect on firm value (PBV). The simultaneous results demonstrate that both capital structure and profitability have a positive and significant impact on firm value (PBV).

The Effect of Profitability, Firm Size and Growth Opportunity On The Value of Manufacturing Companies Listed On The Indonesia Stock Exchange In 2017-2020

This study discusses the effect of profitability, firm size and growth opportunity on firm value in Food and Beverage Sub-Sector Manufacturing Companies Listed on the Indonesia Stock Exchange in 2017-2020. Data processing in this research is using multiple regression model. The source of data in this study is secondary data obtained indirectly from data obtained from the company's annual financial report published on the Indonesia Stock Exchange website. The sample taken in this study used a purposive sampling technique. The results of the analysis of this study indicate that the profitability (ROA) variable partially has a significant effect on firm value (PBV) with a significance (0.016 <0.05). Firm size variable partially has no effect on firm value (PBV) with a significance (0.164 > 0.05, growth opportunity variable partially has a significant effect on firm value (PBV) with a significance (0.000 < 0.05). Simultaneous f test results profitability, firm size and growth opportunity simultaneously affect firm value (significantly 0.000 < 0.05).

The Influence of Institutional Ownership on Firm Value with Dividend Policy and Investment Decisions as Intervening Variables (a Study on Consumer Goods Companies on the Indonesia Stock Exchange)

Performance is measured by company valuation to attract investors. This study examines the effects of institutional ownership on firm value in three ways: 1) directly, 2) indirectly with dividend policy as an intervening variable, and 3) indirectly with investment decisions as an intervening variable. From 279 consumer goods manufacturing companies listed on the Indonesia Stock Exchange until 2023, 52 were selected via purposive sampling. Using the Sobel Test, it was found that: 1) Institutional Ownership positively and significantly impacts Firm Value, 2) Dividend Policy does not mediate the effect of Institutional Ownership on Firm Value, and 3) Investment Decisions do mediate the effect of Institutional Ownership on Firm Value

PENGARUH RASIO KEUANGAN DAN FAKTOR LAINNYA TERHADAP NILAI PERUSAHAAN NON-KEUANGAN DI INDONESIA

The purpose of this research is to obtain empirical evidence about the effect of return on equity, debt to equity ratio, current ratio, firm size, dividend payout ratio, managerial ownership, institutional ownership, and free cash flow on firm value. This research uses samples from all companies except financial sector listed on the Indonesia Stock Exchange (IDX) from 2019 to 2022 with 65 listed non-financial companies used as samples in this research. This sample selection used the purposive sampling method with research data with a total of 195 data and analysis using multiple linear regression. The results of this research showed that return on equity and debt to equity ratio have positive effect on firm value. Higher return on equity shows that the company is generating higher profits and the profits can exceed the cost of equity, thereby giving a positive impression to shareholders which can increase firm value. Higher debt to equity ratio means that the company is more confident about the company’s prospects and increases the management discipline in managing company’s financial, which makes investors interested in buying shares, thereby increasing firm value. Other independent variables such as current ratio, firm size, dividend payout ratio, managerial ownership, and institutional ownership have no effect on firm value.

PENGARUH STRUKTUR MODAL DAN FAKTOR LAINNYA TERHADAP NILAI PERUSAHAAN NON-KEUANGAN DI INDONESIA

This study aims to analyze how the capital structure, institutional ownership, managerial ownership, profitability, company size, dividend policy, and current ratio influence the firm value. The research used all companies listed on the Indonesia Stock Exchange (IDX) except for the financial sector over a 3-year period, from 2020 to 2022. Purposive sampling was employed as the sampling method, and multiple regression analysis was used for data analysis. There were 65 companies and 195 data that met the research criteria. The research findings indicate that capital structure and profitability have a positive influence on company value. High capital structure and profitability lead investors to perceive that the company has promising prospects in the future thereby increasing firm value. Company size has a negative impact on company value because having substantial but idle assets can adversely affect company performance which results decreasing firm value. However, institutional ownership, managerial ownership, dividend policy, and current ratio do not affect firm value.

Pengaruh Profitabilitas, Modal Kerja, dan Umur Perusahaan Terhadap Nilai Perusahaan

This study aims to determine the effect of profitability, working capital and company age on firm value in property and real estate sector companies listed on the Indonesia Stock Exchange for the period 2019 - 2022. The data used in this study was obtained from financial report data and annual reports obtained from the IDX and Yahoo Finance websites. The population in this study are property and real estate sector companies listed on the Indonesia Stock Exchange. This research sample used 54 companies in the property and real estate sector. The analysis technique used in this research is a multiple linear regression analysis test using the Statistical Package for the Social Sciences (SPSS) version 22 program. Based on the results of this research, it shows that profitability has a positive and significant effect on company value, while working capital and company age do not influence on firm value.

THE EFFECT OF GOOD CORPORATE GOVERNANCE, LEVERAGE, AND COMPANY SIZE ON THE VALUE OF PROPERTY AND REAL ESTATE SECTOR COMPANIES

This study was meant to uncover the impact of good corporate governance, leverage, and company size on firms' value in the property and real estate sector listed on the Indonesia Stock Exchange for the period 2020-2022. The population taken into consideration in the research is the firm operating in the property and real estate sector listed on the IDX. The sample selection is by purposive sampling with certain criteria so that 81 data samples are obtained to be studied. The present investigation uses secondary data that came from financial records. The analysis of the data in this study was analyzed by utilizing SPSS for Windows software, which has given deep insight into the relationship between variables. According to the findings of the investigation, proper corporate governance represented by managers’ awareness is one of the factors that raise the worth of a business, in that increased stock ownership by management will lead to more motivation for performance improvement hence increasing the firm’s worth. If handled properly and effectively, leverage can enhance organizational value since increased leverage leads to increased company worth. On the other hand, when total assets are seen as being too large by investors who regard it as a bad signal therefore this may lead to decline in company value. Consequently, a negative relationship exist between company size and firm value.

The Impact of Firm Characteristics on Firm Value: Evidence from Indonesia Stock Exchange

The Impact of Firm Characteristics on Firm Value: Evidence from Indonesia Stock Exchange

Pengaruh Green Accounting, Material Flow Cost Accounting, dan Ukuran Perusahaan terhadap Kinerja Perusahaan dengan Nilai Perusahaan sebagai Variabel Moderating (Studi pada Perusahaan Manufaktur Sektor Industri Barang Konsumsi yang Terdaftar di BEI Tahun 2

This study aims to examine the effect of green accounting, material flow cost accounting, and company size on company performance which is moderated by company value. The type of research used is secondary data quantitative research with a population of manufacturing companies in the consumer goods industry sector listed on the Indonesia Stock Exchange in 2019-2022. The total sample amounted to 86 using purposive sampling method from financial report data or annual reports available on the Indonesia Stock Exchange or on the relevant company website. The data analysis method used is multiple regression analysis and moderated regression analysis (MRA). Company performance is proxied by return on assets (ROA). The results showed that green accounting, material flow cost accounting (MFCA), and company size had an effect on company performance. On the other hand, the fourth, fifth, and sixth hypotheses of firm value were unable to moderate the influence between green accounting, material flow cost accounting (MFCA), and company size on company performance.