IDEAS home Printed from https://ideas.repec.org/a/ers/ijebaa/vviiy2019i2p251-256.html
   My bibliography  Save this article

The Effect of Company Size on Company Profitability and Company Value: The Case of Manufacturing Companies

Author

Listed:
  • Anasthasia Triwulan Budisaptorini
  • Grahita Chandrarin
  • Prihat Asih

Abstract

Purpose: Economic conditions have created a tough competition between companies in the industry. The large companies, seek to obtain, acquire, develop, utilize, maintain and disclose strategic resources to the fullest. The paper aims to examine the effects of company size to company profitability and corporate value. Design/Methodology/Approach: The article used random sampling analyzed by variable linearity assumption test. The population consists by manufacturing companies which are included in LQ 45 Index 2013-2015, during the period February 2013 until August 2015 for 6 consecutive years. There are as many as 25 companies in the sample. Findings: The result shows that firm size has strong influence to the determination of profitability and value of manufacturing companies in Indonesia, while profitability has no effect to their value, neither with company size through profitability to company value. This proves that together the size of the company and profitability have no influence on the value of the company, which is caused by profitability because of no effect on the value of the company. Practical Implications: The perception of investors on the level of corporate success is reflected through the value of the company. Increased corporate value due to high stock prices will make investors believe the prospects of the company in the future. Originality/Value: Results must be used by top management because in a highly competitive environment companies must choose the cheapest way in executing investment plans trying to maximize the value of the company.

Suggested Citation

  • Anasthasia Triwulan Budisaptorini & Grahita Chandrarin & Prihat Asih, 2019. "The Effect of Company Size on Company Profitability and Company Value: The Case of Manufacturing Companies," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 251-256.
    • Handle: RePEc:ers:ijebaa:v:vii:y:2019:i:2:p:251-256
    as

    Download full text from publisher

    File URL: https://ijeba.com/journal/241/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:ers:journl:v:vi:y:2018:i:3:p:146-159 is not listed on IDEAS
    2. S. Suwanti & U. Udin & W. Widodo, 2018. "Person-Organization Fit, Person-Job Fit, and Innovative Work Behavior: The Role of Organizational Citizenship Behavior," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 146-159.
    3. S. Suwanti & U. Udin & W. Widodo, 2018. "Person-Organization Fit, Person-Job Fit, and Innovative Work Behavior: The Role of Organizational Citizenship Behavior," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 3), pages 389-402.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. María del Carmen Valls Martínez & José Manuel Santos-Jaén & Rafael Félix Valls-Úbeda & Rafael Soriano Román, 2023. "COVID-19 and Public Health Spending; Effects on the Economic Sustainability of the Spanish Private Healthcare System," IJERPH, MDPI, vol. 20(2), pages 1-18, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ahmet Cengiz Ucar & Lutfihak Alpkan & Meral Elci, 2021. "The Effects of Person–Organization Fit and Turnover Intention on Employees’ Creative Behavior: The Mediating Role of Psychological Ownership," SAGE Open, , vol. 11(4), pages 21582440211, December.
    2. Roselina Ahmad Saufi & Nur Naha Abu Mansor & Abdul Samad Kakar & Harcharanjit Singh, 2020. "The Mediating Role of Person-Job Fit between Person-Organisation Fit and Intention to Leave the Job: Empirical Evidence from Pakistan," Sustainability, MDPI, vol. 12(19), pages 1-12, October.
    3. Abdul Samad, 2019. "Academia Person-Organisation Fit and Intention to Leave the Job: Does Person-Job Fit Matter?," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 200-215.
    4. Jorge Imer Gaviria-Rivera & Esteban López-Zapata, 2019. "Transformational Leadership, Organizational Climate and Job Satisfaction in Work Teams," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 68-82.

    More about this item

    Keywords

    Company size; profitability; corporate value.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ers:ijebaa:v:vii:y:2019:i:2:p:251-256. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marios Agiomavritis (email available below). General contact details of provider: https://ijeba.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.