Effect of Profitability, Dividend Policy, Free Cash Flow, and Market Capitalization on Bank Firm Value
DOI:
https://doi.org/10.70062/harmonieconomics.v3i1.448Keywords:
Dividend Policy, Firm Value, Free Cash Flow, Market Capitalization, ProfitabilityAbstract
Firm value is a crucial indicator of market perception of a company’s performance and long-term sustainability, particularly in the banking sector, which plays a strategic role in the Indonesian economy. However, inconsistencies in empirical findings regarding the determinants of firm value indicate the need for further investigation. This research aims to analyze the effect of profitability, dividend policy, free cash flow, and market capitalization on firm value, as well as to examine the moderating role of Good Corporate Governance (GCG) in banking sub-sector companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2024 period. This study employs a quantitative research approach using panel data regression analysis and Moderated Regression Analysis (MRA), processed with EViews 12 software. The research sample consists of 13 banking companies selected through purposive sampling, resulting in 52 firm-year observations. The results indicate that profitability and market capitalization have a positive and significant effect on firm value, while dividend policy and free cash flow do not significantly influence firm value. Furthermore, the moderation analysis reveals that only the independent commissioner variable is able to strengthen the relationship between profitability and firm value, whereas GCG self-assessment does not moderate any of the examined relationships. These findings suggest that investors place greater emphasis on fundamental financial performance indicators and the effectiveness of independent commissioners as an internal governance mechanism in enhancing firm value. In conclusion, strengthening profitability performance and optimizing the role of independent commissioners are essential strategies for increasing firm value in the banking sector.
References
Constantinides, G. M. (2005). Theory of valuation. World Scientific. https://doi.org/10.1142/5860
Dewi, R., & Soedaryono, B. (2023). Pengaruh leverage sektor properti dan real estate yang terdaftar di Bursa Efek Indonesia periode 2017–2021. Jurnal Ekonomi Trisakti, 3(1), 1831–1840.
Febiola, & Ekadjaja, A. (2024). Faktor-faktor yang mempengaruhi nilai perusahaan pada perusahaan manufaktur di Indonesia. Jurnal Paradigma Akuntansi, 6(2), 571–579. https://doi.org/10.24912/jpa.v6i2.29597
Gordon, M. J. (1963). Optimal investment and financing policy. The Journal of Finance.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360.
Jessica, & Arfianti, R. I. (2025). Moderasi good corporate governance pada pengaruh kebijakan dividen, profitabilitas, dan ukuran perusahaan terhadap nilai perusahaan. Jurnal Akuntansi, 14(1), 60–72.
Kasmir. (2019). Analisis laporan keuangan. Rajawali Pers.
Lintner, J. (1962). Dividends, earnings, leverage, stock prices and the supply of capital to corporations. The Review of Economics and Statistics, 44(3), 243–269.
Listiorini, & Putri, R. A. (2022). The effect of leverage, return on asset (ROA), and company size on company value with good corporate governance as moderating variable (Study on manufacturing companies). Accounting and Business Journal, 4(1), 38–49. https://doi.org/10.54248/abj.v4i1.4053
Maharani, I. A. D. P. (2021). Pengaruh rasio profitabilitas, leverage, dan kebijakan dividen terhadap nilai perusahaan: Studi pada sektor perbankan di Bursa Efek Indonesia. Widya Manajemen, 3(1), 27–38. https://doi.org/10.32795/widyamanajemen.v3i1.1101
Nurdhiana, Triani, & Yuniarningtyas. (2025). Good corporate governance dalam sektor perbankan: Analisis implementasi berdasarkan kebijakan Bank Indonesia. [Nama jurnal belum dicantumkan], 5(1), 428–437.
Ratnasari, P. S. P., & Purnawati, N. K. (2019). Pengaruh profitabilitas, likuiditas, tingkat pertumbuhan perusahaan, dan leverage terhadap kebijakan dividen. E-Jurnal Manajemen Universitas Udayana, 8(10), 6179–6198.
Veronica, M., & Pebriani, R. A. (2020). Pengaruh faktor fundamental dan makroekonomi terhadap harga saham pada perusahaan industri properti di Bursa Efek Indonesia. Islamic Banking: Jurnal Pemikiran dan Pengembangan Perbankan Syariah, 6, 119–138.
