The Indirect Impact of Profitability on Firm Value: Evidence Dividend Policy as Moderators and Capital Structure as Mediator

Firm value is a basis for investors in deciding whether or not to invest in a firm. Therefore, a study on issuer’s strategies to maximize firm value requires special attention, especially in dealing with the Islamic capital market which is growing rapidly from time to time. A particular study is important to be conducted to look at the factors that have a direct or indirect effect on a firm's value, which includes; profitability, capital structure, and dividend policy. The path analysis approach is employed in the current study to reveal the effect of profitability on firm value, both directly and indirectly, with the intermediaries of capital structure and dividend policy. The results of the analysis indicate that profitability has a direct positive and significant effect on firm value and a negative and significant effect on capital structure, while the capital structure has a negative and insignificant effect on firm value. Indirectly, dividend policy moderates and strengthens the effect of profitability on firm value, but on the other hand, the capital structure does not mediate the effect of profitability on firm value. The absence of capital structure role in mediating the relationship between profitability and the firm value indicates that investors can determine the value of the firm directly by simply looking at the level of profitability, regardless of management’s strategy in arranging the capital structure.

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The Influence of Profitability on Firm Value with Capital Structure as The Mediator

Jurnal Economia ◽

10.21831/economia.v16i2.30405 ◽

2020 ◽

Vol 16 (2) ◽

pp. 184-199

Author(s):

Novi Mubyarto

Keyword(s):

Panel Data ◽

Capital Structure ◽

Path Analysis ◽

Direct Effect ◽

Indirect Effect ◽

Firm Value ◽

Direct Influence ◽

Analysis Method ◽

The Relationship ◽

Significant Direct Effect

Abstract: The purpose of this research was to determine the direct and indirect effect of profitability on firm value using capital structure as a mediator. This involves using panel data from 44 companies listed on LQ45 as of 31st December 2015-2018 and analyzed using the path analysis method including Sobel Test and Bootstrapping technique. The results showed a positive and significant direct effect of profitability on firm value while the indirect effect using capital structure as a mediator between the two variables was found to be negative and significant. Moreover, the direct influence of capital structure on firm value was discovered to be negative and significant while the introduction of profitability variables in the relationship led to a positive and significant influence. Similarly, the direct effect of profitability on firm value using capital structure as the controlling variable was also found to be positive and significant.Keywords: firm value, capital structure, profitabilityPengaruh Profitabilitas Terhadap Nilai Perusahaan dengan Struktur Modal Sebagai MediatorAbstrak: Tujuan dari penelitian ini adalah untuk mengkaji bagaimana pengaruh langsung profitabilitas terhadap nilai perusahaan, dan pengaruh tidak langsung melalui struktur modal sebagai mediator. Menggunakan data panel dari 44 perusahaan yang tercatat di LQ45 per tanggal 31 Desember selama periode 2015 sampai 2018. Metode analisis yang digunakan adalah metode analisis jalur (Path Analysis), dengan Teknik Sobel Test dan Bootsrapping. Hasil riset membuktikan bahwa terdapat pengaruh langsung yang positif dan signifikan antara profitabilitas terhadap nilai perusahaan. Namun, jika dilihat secara tidak langsung pengaruh profitabilitas terhadap nilai perusahaan melalui struktur modal sebagai mediator adalah negatif dan signifikan. Selanjutnya, pengaruh langsung profitabilitas terhadap struktur modal adalah negatif dan signifikan. Sementara ketika dikontrol oleh variabel profitabilitas, pengaruh struktur modal terhadap nilai perusahaan positif dan signifikan. Begitu pula dengan pengaruh langsung profitabilitas terhadap nilai perusahaan dengan mengontrol variabel struktur modal juga positif dan signifikan.Kata kunci: nilai perusahaan, struktur modal, profitabilitas

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The Effect of Firm Size and Profitability on Firm Value with Capital Structure as Intervening Variables in Indonesia

Journal of International Business, Economics and Entrepreneurship ◽

10.24191/jibe.v4i2.14315 ◽

2019 ◽

Vol 4 (2) ◽

pp. 55

Author(s):

Indra Arifin Djashan

Keyword(s):

Capital Structure ◽

Firm Size ◽

Firm Value ◽

Stock Exchange ◽

Company Performance ◽

Purposive Sampling ◽

The Impact ◽

The Relationship ◽

Intervening Variables ◽

The Capital Structure

This study examines the impact of firm size and profitability on firm value with capital structure as an intervening variable in financial companies listed on the Indonesia Stock Exchange during three years. The method used for sampling is purposive sampling based on predetermined criteria. The number of samples in this study were 73 companies. Measurement of profitability is using ROA and ROE as one indicator to see company performance. The main purpose of companies that have gone public is to increase the prosperity of the owners or shareholders through increasing the value of the company. The results showed that the improvement of profitability and firm size may improve its capital structure. The improvement of profitability and the firm size may increase significantly the firm value. The results of mediating test showed that the capital structure is not able to mediate the relationship between the profitability and firm size to firm value

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The Effect of Profitability, Liquidity, and Capital Structure on Firm Value with Dividend Policy as a Moderating Variable in the Company Mining Listed on the Indonesia Stock Exchange

International Journal of Research and Review ◽

10.52403/ijrr.20211241 ◽

2021 ◽

Vol 8 (12) ◽

pp. 328-337

Author(s):

Emelia Febrinawaty Cordiaz ◽

Erlina . ◽

Chandra Situmeang

Keyword(s):

Capital Structure ◽

Firm Value ◽

Dividend Policy ◽

Stock Exchange ◽

Analytical Technique ◽

Independent Variables ◽

Mining Companies ◽

Policy Variable ◽

Negative Effect ◽

The Relationship

The purpose of this study is to examine and analyze the effect of profitability, liquidity, and capital structure on firm value in mining companies listed on the Indonesia Stock Exchange and to test whether dividend policy can moderate the relationship between the independent variables and the dependent variable. The population of this study is all mining companies listed on the Indonesia Stock Exchange from 2011 to 2019. The research sample was determined by the purposive sampling method, so a sample of 11 companies was multiplied by 9 years of research to obtain 99 observations. The analytical technique used in this study is moderating regression analysis (MRA) with Eviews 10 software tools. This study partially shows that profitability has a positive effect on firm value, liquidity has a negative effect on firm value, and capital structure has a negative effect on firm value. All of these independent variables together affect firm value. The dividend policy variable moderates the relationship between profitability and firm value but does not moderate the relationship between liquidity and capital structure on firm value. Keywords: profitability, liquidity, capital structure, dividend policy, firm value.

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The Effect of Institutional Ownership, Capital Structure, Dividend Policy, and Company Growth on Company Value

International Journal of Management and Business (IJMB) ◽

10.46643/ijmb.v1i1.5 ◽

2020 ◽

Vol 1 (1) ◽

pp. 1-9

Author(s):

Reza Mulia Sari ◽

Dina Patrisia

Keyword(s):

Capital Structure ◽

Firm Value ◽

Dividend Policy ◽

Secondary Data ◽

Company Value ◽

Corporate Growth ◽

Final Sample ◽

Company Growth ◽

The Relationship ◽

Positive Effect

This paper aims to examine wheter there is significant institusional ownership, capital structure, dividen policy and company’s growth to firm value. This paper also aims to examine wheter variabel of company’s growth could be moderating this study. Sample of this study uses purposive sampling method in order to obtain a final sample accounting 36 companies with observation period from 2012-2017. Type of data in this study secondary data and uses in multiple linier regression as an analytical tool. The result of this study indicate that institusional ownership has no effect on firm value. Capital structure, dividend policy and company growth have a positive effect on firm value. Corporate growth cannot moderate the reationship between institusional ownership and firm value. Corporate growth weakens the relationship between capital structure and firm value. Corporate growth cannot moderate the relationship between dividend policy and firm value.

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PERAN PROFITABILITAS DALAM MEMODERASI PENGARUH STRUKTUR MODAL DAN KEBIJAKAN DIVIDEN TERHADAP NILAI PERUSAHAAN

JURNAL AKUNTANSI ◽

10.37932/ja.v9i1.92 ◽

2020 ◽

Vol 9 (1) ◽

pp. 1-13

Author(s):

Mislia Ambar Sari ◽

Lela Nurlaela Wati ◽

Bambang Rahardjo

Keyword(s):

Regression Analysis ◽

Capital Structure ◽

Hypothesis Testing ◽

Firm Value ◽

Dividend Policy ◽

Stock Exchange ◽

Sampling Technique ◽

Manufacturing Companies ◽

Analysis Technique ◽

The Capital Structure

This study aims to determine the effect of capital structure and dividend policy on firm value by moderating profitability in food beverages companies. Samples are Food Beverages Sub Sector manufacturing companies listed on the Indonesia Stock Exchange in the 2014-2018 period, which were taken using purposive sampling technique. The analysis technique used is a moderation regression analysis (MRA) using eviews 9. The results of hypothesis testing show that the capital structure variable (DER) has a positive and significant effect on firm value (PBV), dividend policy (EPS) has a positive and significant effect on firm value ( PBV), profitability (ROA) strengthens the effect of capital structure (DER) on firm value (PBV), but profitability (ROA) does not strengthen the effect of dividend policy (EPS) on firm value (PBV). These results indicate that the higher the capital structure financed by debt and the greater the dividends distributed to investors, the higher the firm value.Keywords: Capital Structure, Dividend Policy, Profitability, Firm Value

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PENGARUH STRUKTUR MODAL, BIAYA EKUITAS, DAN KEBIJAKAN DIVIDEN TERHADAP NILAI PERUSAHAAN PADA BADAN USAHA MILIK NEGARA (BUMN) YANG TERDAFTAR DI BURSA EFEK INDONESIA

JURNAL RISET AKUNTANSI DAN AUDITING "GOODWILL" ◽

10.35800/jjs.v6i2.10494 ◽

2015 ◽

Vol 6 (2) ◽

Author(s):

Hendry Victory Supit ◽

Herman Karamoy ◽

Jenny Morasa

Keyword(s):

Capital Structure ◽

Firm Value ◽

Dividend Policy ◽

Stock Exchange ◽

Linear Regression Analysis ◽

Equity Capital ◽

Cost Of Equity ◽

The Cost ◽

The Impact ◽

The Capital Structure

Source of corporate funding is essential to the operations of a firm. The problem that often arises is how companies choose the capital structure that could maximise the firm value but still pay attention to the wishes of investors and creditors to take advantage of the provision of funds through equity capital and debt capital. The purpose of this paper is to examine the impact of capital structure, cost of equity, and dividend policy on the firm value at State Owned Enterprises (BUMN) that are listed in the Indonesia Stock Exchange. The population in this study are all state-owned enterprises listed on the Indonesia Stock Exchange with a study period of 2009 to 2014, totaling 20 companies. Samples were selected using purposive sampling method amounted to 13 companies. The analytical method used multiple linear regression analysis and will be processed first with using classic assumption test. As for the processing of research data using SPSS version 23.0. The test results simultaneously (F test) the capital structure, the cost of equity, and dividend policy have impact on the firm value of state-owned companies in Indonesia. After the partial test (t test), capital structure has negative impact on the firm value, but the cost of equity and dividend policy concluded no impact on firm value.

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STRUKTUR MODAL SEBAGAI VARIABEL MODERASI PENGARUH LIKUIDITAS DAN PROFIBILITAS TERHADAP FIRM VALUE

Media Mahardhika ◽

10.29062/mahardika.v19i3.271 ◽

2021 ◽

Vol 19 (3) ◽

pp. 457-470

Author(s):

Irma Indira ◽

Eva Wany

Keyword(s):

Capital Structure ◽

Firm Value ◽

Sampling Method ◽

Banking Sector ◽

Positive Impact ◽

Purposive Sampling ◽

The Relationship ◽

The Capital Structure ◽

Research Studies

This research aims to conduct testing as well as know the capital structure moderating the influence of liquidity and profitability on firm vaue. The place where this research was conducted is in IDX where it uses the banking sector. The samples used in this study used purposive sampling method with samples of 96 companies from 2016 to 2019. In research studies the use of methods is used to explain the relationship and influence on variables using multiple analysts. The results of this study have proven the results if liquidity has a negative and significant impact on the firm value,while profitability has a positive impact on the firm value. The capital structure is able to moderate liquidity in firm value but does not moderate the influence of prifitability on firm value.

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Financial Decision, Innovation, Profitability and Company Value: Study on Manufacturing Company Listed in Indonesian Stock Exchange

Information Management and Business Review ◽

10.22610/imbr.v7i2.1141 ◽

2015 ◽

Vol 7 (2) ◽

pp. 72-78

Author(s):

Mursalim Mursalim ◽

Nur Alamzah . ◽

Abdullah Sanusi .

Keyword(s):

Capital Structure ◽

Capital Market ◽

Dividend Policy ◽

Stock Exchange ◽

Investment Decision ◽

Secondary Data ◽

Financial Decisions ◽

Company Value ◽

Financial Decision ◽

The Relationship

This study aims to describe the relationship between financial decisions, innovation, enterprise profitability and the value of the company. Based on the research objectives, this research is a causality research. The data used are secondary data for a 5-years period, obtained through several sources such as Indonesian Capital Market Directory (ICMD) and the websites of 22 companies. The results show that (1) Investment decision affects company profitability positively and significantly, (2) Investment decision affects company value positively and significantly, (3) Capital structure affects company profitability positively and significantly, (4) Capital structure affects company value positively and significantly, (5) Dividend policy affects company profitability positively and significantly, (6) Dividend policy does not affect company value, (7) Innovation affects company profitability positively and significantly, (8) Innovation affects company value positively and significantly, and (9) Profitability affects company value positively and significantly.

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