FIRM VALUE IN BANKING SECTOR : THE ROLE OF SIZE, PROFITABILITY, RISK PROFILE, AND DIVIDEND POLICY
Keywords:
Firm Size; Profitability; Risk Profile; Dividend Policy; Firm Value
Abstract
This study explores how internal aspects of companies namely size, profitability, risk profile, and dividend impact firm value Indonesian banking sector listed on the IDX from 2013 to 2022. Using multiple linear regression analysis, the research analyzes 100 data points gathered from the financial statements of banking. The results indicate that both the company's size and its profitability significantly enhance firm value. In contrast, the risk profile has a detrimental effect, suggesting that higher risk undermines investor confidence. The dividend policy does not seem to have a meaningful effect, indicating it is not a vital factor for investors in this industry. These results highlight the necessity of maintaining operational effectiveness and financial soundness to boost the value of firms. This study offers empirical insights into the elements that affect firm value, particularly within the banking industry, and provides useful information for investors and managers to formulate effective strategies.
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Sudimas, M., Ramdany, R., & Ispriyahadi, H. (2023). Does Financial Performance Mediate the Impact of Green Accounting and Environmental Performance on Firm Value? Journal of Governance Risk Management Compliance and Sustainability, 58-73. doi:https://doi.org/10.31098/jgrcs.v3i1.1487
Sulbahri, R., Fuadah, L., Saftiana, Y., & Sidiq, S. (2023). How Capital Adequacy Ratio, Non-Performing Loans and Good Corporate Governance Affect Company Value with Financial Performance as Intervening Variables (Empirical Study of Commercial Banks Registered On the Idx for the 2017-2019 Period). International Journal of Economics and Management Research, 194-214. Retrieved from htts://ijemr.politeknikpratama.ac.id/index.php/ijemr
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Undang-Undang. (1998). Undang-Undang No.10 . Jakarta.
Akhter, W., & Hassan, A. (2023). Does corporate social responsibility mediate the relationship between corporate governance and firm performance? Empirical Empirance from BRICs Countries. Wiley, 1-13. doi:10.1002/csr.2586
Albu, A. (2021). Organisation of Industry. Nature.
Alqatan, A., Chbib, I., & Hussainey, K. (2019). How Does Board Structure Impact On Firm performance in The UK? Corporate Board: Role, Duties & Composition, 18-27. doi:10.22495/cbv15i2art2
Al-Slehat, Z. (2020). Impact of Financial Leverage, Size and Assets Structure on Firm Value: Evidence from Industrial Sector, Jordan. International Business Research, 109-120. doi:10.5539/ibr.v13n1p109
Anisa , H., & Suryandari, D. (2021). The Effect of NPL, GCG Self Assessment, ROA, and CAR on Firm Value (Empirical Study on Commercial Banks listed on the Indonesia Stock Exchange). Accounting and Finance Studies, 111-124. .
Azaro, K., Djajanto, L., & Sari, P. (2019). The Influence of Financial Ratios and Firm Size on Firm Value. Advances in Economics, Business and Management Research, 142-147. doi:10.2991/aebmr.k.200415.028
Barone, A. (2022, Juni 4). Bird In Hand: Definition as Strategy in Investing and Examples. Retrieved from Investopedia: https://www.investopedia.com/terms/b/bird-in-hand.asp
Bhattacharya, S. (1979). Imperfect information, dividend policy, and "the bird in the hand" fallacy. The Bell Journal of Economics, 259–270. doi:https://doi.org/10.2307/3003330
Boussaada, R., Hakimi, A., & Karmani, M. (2023). Non-performing loans and bank performance: what role does corporate social responsibility play? A system GMM analysis for European banks. Journal of Applied Accounting Research, 859-888. doi:10.1108/JAAR-10-2021-0283
Brigham, E., & Houston, J. (2018). Dasar-Dasar Manejemen Keuangan. Jakarta: Salemba Empat.
Chen, J. (2023, September 29). Dividend Policy: What It Is and How the 3 Types Work. Retrieved from Investopedia: https://www.investopedia.com/terms/d/dividendpolicy.asp
CNBC. (2023, Mei 15). 20 Saham Terbesar di RI, Nomor 1 Punya Orang Terkaya. . Retrieved from CNBC: https://www.cnbcindonesia.com/market/20230515092906-17-437280/20 saham-terbesar-di-ri-nomor-1-punya-orang-terkaya
Dang, H., Nguyen, T., & Tran, D. (2020). The Impact of Earnings Quality on Firm Value: The Case of Vietnam. Journal of Asian Finance Economics and Business, 63-72. doi:10.13106/jafeb.2020.vol7.no3.63
Dang, H., Vu, V., Ngo, X., & Hoang, H. (2019). Study the Impact of Growth,Firm Size, Capital Structure,and Profitability on EnterpriseValue:Evidence of Enterprisesin Vietnam. The Journal of Corporate Accounting & Finance, 146-162. doi:10.1002/jcaf.22371
Diana, E. (2020). Examining the Factors Affecting Firm Values : The Case of Listed Manufacturing Companies In Indonesia. Journal of Accounting, 62-72. doi:10.24815/jaroe.v3i1.15532
Felicia,, Edward, Y., Simorangkir, E., & Ginting, R. (2022). the Effect of Profitability, Company Size and Growth Opportunity toward Firm Value with Capital Structure as Intervening Variable in Consumer Goods Companies Listed on Indonesia Stock Exchange period 2018-2020. Journal of Economics, Finance and Management Studies, 335-345.
Hakim, I., & Sugianto. (2018). Determinant Profitability and Implications on the Value of the Company: Empirical Study on Banking Industry in IDX. International Journal of Economics and Financial, 205-216. .
Handriani, E., & Robiyanto. (2018). Corporate Finance and Firm Value in The Indonesian Manufacturing Companies. International Research Journal of Business Studies, 113-127. doi:10.21632/irjbs
Hayes, A. (2021, April 30). Q Ratio or Tobin's Q: Definition, Formula, Uses, and Examples. Retrieved from Investopedia: https://www.investopedia.com/terms/q/qratio.asp
Henisz, W. (2023). The Value of Organizational Purpose. Strategy Science.
Hidayat, W. (2019). Pengaruh ukuran perusahaan, return on equity dan leverage terhadap nilai perusahaan pada perusahaan manufaktur di indonesia. Forum Ekonomi, 67-75.
Husna, A., & Satria, I. (2019). Effects of Return on Asset, Debt to Asset Ratio, Current Ratio, Firm Size, and Dividend Payout Ratio on Firm Value. . International Journal of Economics and Financial Issues, 50-54.
Li, K., Fang, B., He, X., & Shan, Y. (2021). Corporate immunity to the COVID-19 pandemic. Journal of Financial Economics, 802–830. doi:https://doi.org/10.1016/j.jfineco.2021.03.005
Mukti, A., & Winarso, B. (2020). Profitabilitas dan Struktur Modal Terhadap Nilai Perusahaan dengan Variabel Corporate Social Responsibility Sebagai Moderasi. Jurnal REKSA: Rekayasa Keuangan, Syariah, dan Audit, 73-83.
Nila, L., & Suryanawa, I. (2018). Pengaruh Profitabilitas dan Ukuran Perusahaan Terhadap Nilai Perusahaan dengan Pengungkapan Corporate Social Responsibility Sebagai Pemoderasi. E-Jurnal Akuntansi Universitas Udayana, 2145-2174. doi:https://doi.org/10.24843/EJA.2018.v23.i03.p20
OJK. (2023, Nopember 25). Peraturan Bank Indonesia tentang Penetapan Status dan Tindak Lanjut Pengawasan Bank Umum Konvensional. Retrieved from Otoritas Jasa Keuangan: https://ojk.go.id/id/regulasi/Pages/PBI-tentang Penetapan-Status-dan-Tindak-Lanjut-Pengawasan-Bank-Umum Konvensional.aspx
Prabawati, N., Pradnyani, N., & Suciwati, D. (2021). Pengaruh RGEC (Risk Profile, Good Corporate Governance, Earnings, dan Capital) terhadap Nilai Perusahaan (Studi Kasus Perusahaan Perbankan di BEI 2016-2018). Jurnal Bisnis & Kewirausahaan, 78-85.
Prihadi, T. (2019). Analisis Laporan Keuangan Konsep dan Aplikasi. Jakarta: PT.Gramedia Pustaka Utama.
Putra, T. (2020, September 10). Saham Perbankan Tumbang (Lagi), Waktunya Serok? Retrieved from CNBC: https://www.cnbcindonesia.com/market/20200910140153-17185843/saham-perbankan-tumbang--lagi--waktunya-serok Indonesia
Siregar, S., Toni, N., & Ariesa, Y. (2023). Impact of dividend policy, capital structure, and profitability on consumer goods firm value: Role of firm size (2013-2022). Journal of Economics and Business Letters, 38-48. doi:10.55942/jebl.v3i4.234
Sudimas, M., Ramdany, R., & Ispriyahadi, H. (2023). Does Financial Performance Mediate the Impact of Green Accounting and Environmental Performance on Firm Value? Journal of Governance Risk Management Compliance and Sustainability, 58-73. doi:https://doi.org/10.31098/jgrcs.v3i1.1487
Sulbahri, R., Fuadah, L., Saftiana, Y., & Sidiq, S. (2023). How Capital Adequacy Ratio, Non-Performing Loans and Good Corporate Governance Affect Company Value with Financial Performance as Intervening Variables (Empirical Study of Commercial Banks Registered On the Idx for the 2017-2019 Period). International Journal of Economics and Management Research, 194-214. Retrieved from htts://ijemr.politeknikpratama.ac.id/index.php/ijemr
Sumarno, R., & Setiawan, D. (2023). The Effect of Capital Structure, Dividend Policy, and Foreign Ownership on Firm Value. Journal of Economics, Finance and Management Studies, 4182-4189. doi:10.47191/jefms/v6-i906
Undang-Undang. (1998). Undang-Undang No.10 . Jakarta.
Published
2025-08-05
How to Cite
Halawa, J. (2025). FIRM VALUE IN BANKING SECTOR : THE ROLE OF SIZE, PROFITABILITY, RISK PROFILE, AND DIVIDEND POLICY. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi (MEA), 9(2), 2208-2222. https://doi.org/10.31955/mea.v9i2.6090
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