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Examining the effect of firm-specific factors on the automotive industry in Indonesia

Author

Listed:
  • Reschiwati Reschiwati

    (Sekolah Tinggi Ilmu Ekonomi Y.A.I Jakarta)

  • Alya Budiantini

    (Sekolah Tinggi Ilmu Ekonomi Y.A.I , Jalan Salemba Raya No 7-9 A , Paseban, 10440, Jakarta, Indonesia)

  • Gusmiarni Gusmiarni

    (Sekolah Tinggi Ilmu Ekonomi Y.A.I , Jalan Salemba Raya No 7-9 A , Paseban, 10440, Jakarta, Indonesia)

Abstract

This study aims to examine the factors that affect the value of manufacturing companies in the Automotive Industry Sub-Sector Listed on the Indonesia Stock Exchange in 2015 - 2019. These factors are firm size and financial performance. The financial performance consists of liquidity, profitability, and solvency. The number of manufacturing companies in the Automotive Industry sub-sector which was made into the population was 13. Sampling was using the purposive sampling technique. Based on the predetermined criteria, there were 10 companies that met the criteria so that there were 50 observations. Data collection techniques use documentation from financial reports published on the official website of the Indonesia Stock Exchange. The model used in this research is panel data regression using the Eviews application. The findings of this study indicate that of the four independent variables tested, only the solvency variable affects firm value, but the simultaneously firm size and financial performance have a significant effect on firm value. The results of this study indicate that in general, stock investors view the importance of all financial ratios, but can ignore short-term financial symptoms that are reflected in company size, profitability, and liquidity, but should pay more attention to the security of long-term investments which can be seen insolvency. Key Words:Firm value, firm size, liquidity, profitability, solvency.

Suggested Citation

  • Reschiwati Reschiwati & Alya Budiantini & Gusmiarni Gusmiarni, 2021. "Examining the effect of firm-specific factors on the automotive industry in Indonesia," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(3), pages 36-45, April.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:3:p:36-45
    DOI: 10.20525/ijrbs.v10i3.1092
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    References listed on IDEAS

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    1. Sri Hermuningsih, 2013. "Pengaruh Profitabilitas, Growth Opportunity, Struktur Modal Terhadap Nilai Perusahaan Pada Perusahaan Publik Di Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 16(2), pages 1-22, October.
    2. Stephen A. Ross, 1977. "The Determination of Financial Structure: The Incentive-Signalling Approach," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 23-40, Spring.
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