FINANCIAL PERFORMANCE, INSTITUTIONAL OWNERSHIP, SIZE, AND FIRM VALUE : A STRUCTURAL EQUATION MODELING APPROACH

Authors

  • N Rusnaeni Universitas Pamulang, Indonesia
  • Hari Gursinda Universitas Pakuan, Indonesia
  • Hendro Sasongko Universitas Pakuan, Indonesia
  • Dani Rahman Hakim Universitas Pamulang, Indonesia

DOI:

https://doi.org/10.29040/ijebar.v6i1.3856

Abstract

This study analyzed the effect of financial performance, institutional ownership, and firm size on firm value. This study used the partial least square structural equation modeling (PLS-SEM) analysis to examine which indicators best measure financial performance. This study employed panel data from Indonesia's 13 property and real estate sector companies. This study found that the return on assets ratio is the only indicator measuring financial performance. This study also found that financial performance positively affects firm value. On the other hand, institutional ownership affected the firm value negatively. In contrast, this study failed to prove any positive effect of firm size on firm value. This study indicated that investors tend to pay close attention to profitability as the primary consideration when investing in property and real estate companies' shares. Another implication of this research is that the significant institutional ownership in a company tends to make investors uninterested

Author Biographies

N Rusnaeni, Universitas Pamulang

Lecturer at Universitas Pamulang

Hari Gursinda, Universitas Pakuan

Professor at Universitas Pakuan

Hendro Sasongko, Universitas Pakuan

Assoc Professor at Universitas Pakuan

Dani Rahman Hakim, Universitas Pamulang

Lecturer at Universitas Pamulang

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Published

2022-03-23

How to Cite

Rusnaeni, N., Gursinda, H., Sasongko, H., & Hakim, D. R. (2022). FINANCIAL PERFORMANCE, INSTITUTIONAL OWNERSHIP, SIZE, AND FIRM VALUE : A STRUCTURAL EQUATION MODELING APPROACH. International Journal of Economics, Business and Accounting Research (IJEBAR), 6(1), 799–812. https://doi.org/10.29040/ijebar.v6i1.3856

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Vol. 6 No. 1 (2022): IJEBAR : Vol. 6, Issue 1, March 2022

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