Research of Finance and Banking

Do Earnings, Debt Decisions, Dividends Policy, and Size Affect Firm Value? Evidence from the Property and Real Estate Sector

2024-10-02T21:20:54+07:00

The objective of this study is to assess the impact of Price Earning Ratio (PER), Debt to Equity Ratio (DER), Dividend Payout Ratio (DPR), and Firm Size on Firm Value in the Property and Real Estate Sector listed on the Indonesia Stock Exchange. The research was conducted on a population of 79 companies with a sample size of 15, using purposive sampling. Secondary data from the Indonesian Stock Exchange website and the companies' websites was utilized for the study. The research employed panel data regression as the method. The findings suggest that PER, DER, and DPR have no significant impact on firm value. In contrast, firm size negatively and significantly affects firm value. When considered together, all independent variables significantly affect firm value. The managerial implications of this research highlight the importance of comprehending the relationship between PER, DER, DPR, and Firm size on Firm value, providing crucial strategic insights for managers to enhance the firm's appeal to investors by demonstrating the potential for higher profit growth.

The Effect of ESG and Green Innovation on the Financial Performance of Listed Firms

2025-03-18T20:07:30+07:00

This study examines the impact of Environmental, Social, and Governance (ESG) practices and green innovation on corporate financial performance, measured by Tobin's Q. With sustainability gaining prominence globally and in Indonesia evident in the rise of the ESG Leaders Index there remains limited empirical evidence on its financial implications in the Indonesian context. Using purposive sampling, 19 companies listed in the ESG Leaders Index were analyzed from 2020 to 2022. Results show that ESG practices had a negative but insignificant effect on financial performance, whereas green innovation had a positive and significant impact. Additionally, firm size and leverage were found to significantly influence performance. These findings highlight that while ESG implementation in Indonesia faces obstacles such as high costs and limited integration, green innovation presents a more immediate pathway to financial improvement. For managers, this suggests prioritizing environmentally friendly innovation can boost efficiency, reduce costs, and attract sustainability-minded stakeholders. Meanwhile, ESG practices should be approached with a strategic, long-term mindset to realize their potential value. Sustainability should be embraced not merely as compliance but as a forward-looking investment contributing to long-term profitability.

Exploring Key Determinants of Indonesia Bank Profitability: An In-Depth Analysis

2025-03-18T20:06:07+07:00

This study aims to examine the effect of Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), Operating Costs, Operating Income (BOPO), and Financing to Deposit Ratio (FDR) on bank profitability, measured by Return on Assets (ROA). The research originates from the need to evaluate financial performance indicators that influence profitability, especially in state-owned commercial banks listed on the Indonesia Stock Exchange (IDX). These banks play a pivotal role in Indonesia's financial system, making them critical subjects for analysis. The study uses secondary data sourced from the IDX for the 2018–2020 period and applies purposive sampling to select 7 banks, resulting in 21 data samples. Data analysis involves both partial and simultaneous hypothesis testing. The findings indicate that NPF, BOPO, and FDR have a significant effect on profitability, while CAR does not. Simultaneously, all variables significantly influence ROA. Managerial implications highlight the importance of focusing on operational efficiency, managing asset quality, and optimizing credit distribution to enhance profitability. Understanding these financial ratios enables bank managers to formulate more targeted and effective strategies to improve performance and sustain long-term financial health

Growth vs Value: A GARCH-APT Approach to Analyzing IDX Market Indices

2025-04-09T16:36:40+07:00

Value and growth investing strategies are often compared in the investment world. This study analyzes the differences in performance of the IDX Value30 and IDX Growth30 indices as a representation of these strategies in Indonesia during the period from January 30, 2014, to September 30, 2022. Measurements were made using the Treynor Ratio, Information Ratio, and stock selection and market timing evaluations through the GARCH (1,1) model. In addition, the APT model was also used to test the influence of macroeconomic factors, such as inflation, IDR/USD exchange rate, and 5-year Government Bond Yield. The comparison of Treynor and Information Ratio was tested using the Mann-Whitney and independent sample t-test. The results show that both indices have positive performance ratios but are not significantly different. Both do not show stock selection capabilities, but IDX Value30 has market timing capabilities. The IDR/USD exchange rate has a negative effect, and the 5-year Government Bond Yield has a positive effect on IDX Value30, while there are no significant macroeconomic factors on IDX Growth30. This research provides a new contribution through a comprehensive analysis of IDX Value30 and IDX Growth30, which can be used as a reference for investment strategies in the Indonesian capital market.

Fundamental Factors and Stock Returns: Market Capitalization’s Role in Forming Investment Outcomes

2025-03-18T20:11:10+07:00

Telecommunication is one type of industry that has a major influence on the smooth running of economic activities. Communication is the main activity in business activities and contributes significantly to the Indonesian economy. In Indonesia, some telecommunications companies have gone public such as PT. Telekomunikasi Indonesia Tbk, PT. Indosat Tbk, PT. XL Axiata Tbk, and PT. Smartfren Telecom Tbk. The shares of these companies have returned to their owners every year with different return values. This finding is the basis for conducting research on the four major telecommunications companies that have large capitalization values and a large market share and, have been established for a long time and are still consistent to this day. The managerial implications of this study indicate that understanding fundamental factors such as profitability, liquidity, and capital structure is very important for company management in increasing stock returns and market capitalization. By optimizing fundamental performance, companies can increase their attractiveness to investors and strengthen their market position. In addition, the role of market capitalization as a moderating variable confirms that companies with large capitalization tend to be more stable in facing market fluctuations.