DOI: https://doi.org/10.14710/dijb.4.2.2021.82-94

Determinants of firm value: evidence from listed insurance companies in Indonesia

1Sahid University Jakarta, Indonesia

2STIE Muhammadiyah Jakarta, Indonesia

Open Access Copyright 2021 Diponegoro International Journal of Business under http://creativecommons.org/licenses/by-sa/4.0.

Citation Format:
Abstract

This study was conducted to determine the effect of Return on Asset (ROA), Debt to Equity Ratio (DER), and Current Ratio (CR) on firm value in insurance companies listed in Indonesia Stock Exchange from 2015 to 2019. The population in this research was 12 companies in various Insurance listed in the Indonesian Stock Exchange. The analytical method used three regression estimations (pooled OLS, fixed effects model (FEM), and random effects model (REM)). The results indicated that the Return on Asset, Debt to Equity Ratio, and Current Ratio had a significant negative effect on firm value. Our key finding from this research showed that when the profit was higher, the companies prefer to hold their earnings and use for an investment to generate growth opportunities. This phenomenon had explained when companies had higher yields, the firm's value went down. Therefore, this research is following the Pecking Order Theory. Further interaction analysis between DER and CR on firm value uncovers that both DER and CR also negatively affect firm value.

 

Fulltext View|Download
Keywords: return on asset; debt to equity ratio; current ratio; firm value

Article Metrics:

Article Info
Section: Articles
Language : EN
Recent articles
Front matter Back matter Determinants of firm value: evidence from listed insurance companies in Indonesia Analysis of factors affecting profitability of sharia commercial banks: evidence from Indonesia The effect of perceived organizational support and psychological capital on OCB: mediating role of engagement More recent articles
  1. Acaravci (2015), Acaravci, S. K. (2015). The Determinants of Capital Structure: Evidence from the Turkish Manufacturing Sector. International Journal of Economics and Financial Issues, 5(1), 158–171
  2. Ang, Robert. 1997. Buku Pintar Pasar Modal Indonesia (The Intelligent Guide to Indonesian Capital Market). Jakarta: Mediasoft, Indonesia
  3. Anggraini, R. D. (2017). Pengaruh Profitabilitas Terhadap Nilai Perusahaan Dengan Struktur Modal Sebagai Variabel Moderasi. 110. Jurnal Ekonomi, Universitas Sumatera Utara
  4. Annisa & Chabachib (2017), Analisis Pengaruh Current Ratio (CR), Debt to Equity Ratio (DER), Return on Asset (ROA) Terhadap Price to Book Value (PBV), Dengan Devidend Payout Ratio (DPR) Sebagai Variable Interverning ( Studi Kasus pada Perusahaan Industri Manufaktur yang Terdaftar. Journal of Management, 6, 1–15. Fakultas Ekonomi dan Bisnis, Jurusan Management Universitas Sam Ratulangi
  5. Basuki, A. T. (2017). Pengantar Ekonometrika. Alfabeta, Bandung
  6. Batten, Jonathan & Vo, Xuan Vinh, (2019). Liquidity And Firm Value In An Emerging Market, The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(02), pages 365-376, March
  7. Bhattacharya and Dittmar (2004), Bhattacharya, Utpal dan Dittmar, Amy, (2001) Costless Versus Costly Signaling: Theory and Evidence from Share Repurchases, Seminar participants, Indiana University
  8. Brigham, E. F and J. F. Weston. (2010). Dasar-dasar Manajemen Keuangan, Edisi. 9, Erlangga
  9. Cahyono, D. D., & Prabawa, S. A. (2011). Pengaruh ukuran Perusahaan, Profitabilitas, Pertumbuhan Asset, Dan Risiko Bisnis Terhadap Struktur Modal Pada Perusahaan Manufaktur Yang Terdaftar di BEI Periode 2008--2012. Jurnal Ilmiah Manajemen Universitas Bengkulu
  10. Cheung, A.W.K. (2011). Do stock investors value corporate sustainability? Evidence from an event study. Journal of Business Ethics, 99, 145- 165
  11. Culata, Priska R.E; and Gunarsih, Tri (2012), Pecking Order Theory and Trade-off Theory of Capital Structure: Evidence from Indonesian Stock Exchange, Universitas Teknologi Yogyakarta, Journal The WINNERS, Vol. 13 No. 1, Maret 2012: 40-49
  12. Dewantoro, A and Thaib, I (2017). Pengaruh Profitabilitas dan Likuiditas Terhadap Nilai Perusahaan dengan Struktur Modal Sebagai Variable Intervening. Jurnal Riset Perbankan Manajemen dan Akuntansi Vol.1.No.1
  13. Ernayani et al., (2017), Formulation of a Dynamic Portfolio with Stocks and Fixed-Income Instruments in The Indonesian Capital Market, ISSN 2029-4581. Online ISSN 2345-0037, 2019, VOL. 10, No. 1(19)
  14. Ernitasianturi, M. W. (2015). Pengaruh Kinerja Keuangan Terhadap Nilai Perusahaan Manufaktur Sektor Industri Barang Konsumsi Di BEI. EJournal Ilmu Administrasi Bisnis, 3(2), 282–296
  15. Fadhli, M. (2013). Pengaruh Likuiditas, Solvabilitas dan Profitabilitas Terhadap Nilai Perusahaan Dengan Kebijakan Deviden sebagai Variabel Moderasi Pada Perusahaan Perbankan, Asuransi dan Lembaga Keuangan Lainnya di Bursa Efek Indonesia Tahun 2010-2013. Jurnal Ekonomi Universitas Riau, 1–14
  16. Fajaria & Isnalita (2018), (2018). The Effect Of Profitability, Liquidity, Leverage, And Firm Growth Of Firm Value With Its Dividend Policy As A Moderating Variable. International Journal of Managerial Studies And Research (Ijmsr), 6(10), 55–69
  17. Ghozali, I. (2013). Analisis Multivariat dan Ekonometrika Teori, Konsep dan Aplikasi dengan Eviews 8. Universitas Diponegoro. Semarang
  18. Gitman and Zutter (2012). Principles of Managerial Finance. United States: Pearson Addison Wesley
  19. Hamidah, G., & Umdiana, N. (2017). Pengaruh Profitabilitas Dan Investmen Opportunity Set Terhadap Nilai Perusahaan Dengan Harga Saham Sebagai Intervening. Jurnal Akuntansi, 3(2), 90–106
  20. Handriani, E., & Irianti, T. E. (2015). Investment Opportunity Set Bebasis Pertumbuhan Perusahaan Dan Kaitannya Dengan Upaya Peningkatan Nilai Perusahaan. Ekonomi Dan Bisnis, XVIII(1)
  21. Harmono (2011), Manajemen Keuangan: Berbasis Balanced Scorecard Pendekatan Teori, Kasus dan Riset Bisnis.BPFE, Yogyakarta
  22. Hasbi, Hariandy. (2015). Islamic Microfinance Institution: The Capital Structure, Growth, Performance, and Value of Firm In Indonesia. ScienceDirect: Procedia Social and Behavioral Sciences 211. Pp 1073-1080
  23. Hermawan, S., & Maf’ulah, A. N. (2014). Pengaruh Kinerja Keuangan Terhadap Nilai Perusahaan Dengan Pengungkapan Corporate Social Responsibility sebagai Variabel Pemoderasi. Jurnal Dinamika Akuntansi. Universitas Pendidikan Indonesia; Journal of Business Management Education
  24. Hertina, D., Bayu, M., Hidayat, H., & Mustika, D. (2019). Ukuran Perusahaan , Kebijakan Hutang Dan Profitabilitas Pengaruhnya Terhadap Nilai Perusahaan. Jurnal Ecodemica, 3(1)
  25. Hery. (2016). Analisis Laporan Keuangan-Integrated And Comprehensive Edition. PT. Grasindo, Jakarta
  26. Hossain, Akhtaruddin M., and Hossain, M., (2015). "Corporate Governance and Voluntary Disclosure in Annual Corporate Reports of Malaysian Listed Firms." Journal of Applied Management Accounting Research, (Winter):1-20
  27. Jacoby, G. and Zheng, S.X. (2013). Ownership dispersion and market liquidity. International Review of Financial Analysis. Vol. 19 No. 2, pp. 81-88
  28. Kasmir (2014), Bank dan Lembaga Keuangan lainnya. Jakarta: PT. Raja Grafindo Persada
  29. Koh, Annie., Ser-Keng Ang, Eugene F Brigham, Michael C Ehrhardt. (2014). Financial Management Theory and Practice. Singapore: Cengange Learning Asia
  30. Mahendra, A. D. (2012). Pengaruh Kinerja Keuangan Terhadap Nilai Perusahaan Pada Perusahaan Manufaktur di Bursa Efek Indonesia. 130–138. Vol. 7, No. 2, Juli 2012. AUDI Jurnal Akuntansi & Bisnis
  31. Mardiyati, Umi; Gatot Nazir Ahmad dan Ria Putri. (2012). Pengaruh Kebijakan Dividen, Kebijakan Hutang dan Profitabilitas terhadap Nilai Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia (BEI) Periode 2005- 2010. Jurnal Riset Manajemen Sains Indonesia (JRMSI): Vol. 3, No. 1
  32. Miller & Modigliani -MM (1961) Modigliani, F., and Miller, H. (1963). Corporate in¬come taxes and the cost of capital: a correction, American Economic Review, Vol. 53: 443-453
  33. Myers, S. C. (1984). The Capital Structure Puzzle. Journal of Finance, 39(3), 575– 592
  34. Myers, S. C., & Majluf, N. S. (1984). Corporate Financing and Investment Decisions When Firms Have Information the Investors Do Not Have. Journal of Financial Economics, 13(2), 187–221
  35. Pervaiz, Akhtar., Husnain, Muhammad and Mukhtar, Muhammad Ahsan. (2012). The Determinants of Capital Structure: A Case from Pakistan Textile Sector (Spinning Units). International Conference on Business Management
  36. Prasetyorini, B. F. (2013). Pengaruh Ukuran Perusahaan Leverage, Price Earning Ratio dan Profitabilitas terhadap Nilai Perusahaan. Jurnal Riset Akuntansi Indonesia. Volume 7 Nomor 2
  37. Pratiwi, P. (2018). Pengaruh struktur kepemilikan terhadap nilai perusahaan dengan kebijakan hutang sebagai variabel intervening. JOM FISIP, Vol.4, No.2, 111
  38. Putra & Sedana (2019), Candradewi, Bagus, & Sedana. (2016). ISSN : 2302-8912 Pengaruh Kepemilikan Manajerial , Kepemilikan Institusional Dan Dewan Komisaris Independen Terhadap Return On Asset Fakultas Ekonomi Dan Bisnis Universitas Udayana ( Unud ), Bali , Indonesia Menghadapi persaingan bisnis yang kompetitif ,. EJurnal Manajemen Unud, 5(5), 3163–3190
  39. Sastrodiharjo and Sutama, (2015), Sastrodiharjo, Istianingsih dan Sutama, I Putu. 2015. Faktor-faktor yang Memepengaruhi Pertumbuhan Aset Perusahaan Asuransi Jiwa Syariah Di Indonesia. Jurnal Akuntabilitas. Vol. VII. No. 1
  40. Sugiono. (2012). Statistik Untuk Penelitian. Alfabeta; Bandung
  41. Sulasmiyati, S. (2016). Pengaruh struktur modal, struktur kepemilikan dan profitabilitas terhadap nilai perusahaan pada perusahaan sektor industri dasar dan kimia yang terdaftar di BEI tahun 2011-2014. 35(1). Universitas Muhammadiyah Surakarta
  42. Sunaryo, D., & Adiyanto, Y. (2017). Pengaruh Debt to Equity Ratio (DER) dan Deviden Payout Ratio (DPR) Terhadap Nilai PerusahaanPada Manufaktur Sektor Indusrti Untuk Konsumsi yang Terdaftar di BEI Tahun 2012 – 2017. Universitas Muhammadiyah Surakarta, 33–53
  43. Tahu, G. P., & Susilo, D. D. B. (2017). Effect of Liquidity, Leverage, and Profitability To The Firm Value (Dividend Policy As Moderating Variable) In Manufacturing Company Of Indonesia Stock Exchange. Research Journal of Finance and Accounting, 8(18), 89–98
  44. Torres-Reyna, O. (2014). Panel Data Analysis Fixed & Random Effects. Princeton University
  45. Ulya, H. (2014). Analisis Pengaruh Kebijakan Hutang, Kebijakan Deviden, Profitabilitas, Kinerja Perusahaan dan Keputusan Investasi Terhadap Nilai Perusahaan
  46. Yanti Asmita, N. Y., & Dwirandra, A. (2019). The Effect of Profitability in Income Smoothing Practice with Good Corporate Governance and Dividend of Payout Ratio as a Moderation Variable. International Research Journal of Management, IT and Social Sciences, 6(2), 12-21
  47. Yaomil, Grace F (2019), Pengaruh intellectual capital dan corporate governance terhadap kinerja keuangan perusahaan (studi pada perusahaan indeks LQ-45 periode 2013-2017), FEB Usakti, Jakarta
  48. Zuhroh (2019), The Effects of Liquidity, Firm Size, and Profitability on the Firm Value with Mediating Leverage, DOI: 10.18502/kss.v3i13.4206

Last update:

No citation recorded.

Last update:

No citation recorded.