Determinants of firm value: evidence from listed insurance companies in Indonesia
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...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Department of Management, Faculty of Economics and Business, Diponegoro University
2021-12-01
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| Series: | DIJB (Diponegoro International Journal of Business) |
| Subjects: | |
| Online Access: | https://ejournal2.undip.ac.id/index.php/ijb/article/view/11236 |
| _version_ | 1818018304905707520 |
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| author | I Ismiyatun Nafiah Aryani Heri Ispriyahadi |
| author_facet | I Ismiyatun Nafiah Aryani Heri Ispriyahadi |
| author_sort | I Ismiyatun |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-04-14T07:37:14Z |
| format | Article |
| id | doaj.art-fbec080d7ea6435ebb9e397281d9e874 |
| institution | Directory Open Access Journal |
| issn | 2580-4987 2580-4995 |
| language | English |
| last_indexed | 2024-04-14T07:37:14Z |
| publishDate | 2021-12-01 |
| publisher | Department of Management, Faculty of Economics and Business, Diponegoro University |
| record_format | Article |
| series | DIJB (Diponegoro International Journal of Business) |
| spelling | doaj.art-fbec080d7ea6435ebb9e397281d9e8742022-12-22T02:05:39ZengDepartment of Management, Faculty of Economics and Business, Diponegoro UniversityDIJB (Diponegoro International Journal of Business)2580-49872580-49952021-12-0142829410.14710/dijb.4.2.2021.82-946013Determinants of firm value: evidence from listed insurance companies in IndonesiaI Ismiyatun0Nafiah Aryani1Heri Ispriyahadi2https://orcid.org/0000-0001-8919-198XSahid University Jakarta, IndonesiaSahid University Jakarta, IndonesiaSTIE Muhammadiyah Jakarta, IndonesiaThis 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.https://ejournal2.undip.ac.id/index.php/ijb/article/view/11236return on assetdebt to equity ratiocurrent ratiofirm value |
| spellingShingle | I Ismiyatun Nafiah Aryani Heri Ispriyahadi Determinants of firm value: evidence from listed insurance companies in Indonesia DIJB (Diponegoro International Journal of Business) return on asset debt to equity ratio current ratio firm value |
| title | Determinants of firm value: evidence from listed insurance companies in Indonesia |
| title_full | Determinants of firm value: evidence from listed insurance companies in Indonesia |
| title_fullStr | Determinants of firm value: evidence from listed insurance companies in Indonesia |
| title_full_unstemmed | Determinants of firm value: evidence from listed insurance companies in Indonesia |
| title_short | Determinants of firm value: evidence from listed insurance companies in Indonesia |
| title_sort | determinants of firm value evidence from listed insurance companies in indonesia |
| topic | return on asset debt to equity ratio current ratio firm value |
| url | https://ejournal2.undip.ac.id/index.php/ijb/article/view/11236 |
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