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The effect of policy on debt and profitability with firm values with corporate governance as moderate variables

Author

Listed:
  • Randy Chaidir

    (Accounting Department, Faculty of Economics and Business, University of Brawijaya, Malang, Indonesia)

  • Rosidi Rosidi

    (Assoc. Prof., Accounting Department, Faculty of Economics and Business, University of Brawijaya, Malang, Indonesia)

  • Wuryan Andayani

    (Assoc. Prof., Accounting Department, Faculty of Economics and Business, University of Brawijaya, Malang, Indonesia)

Abstract

This study aims to determine the effect of debt policy and profitability on firm value moderated by corporate governance. This study uses secondary data on manufacturing companies listed on the Indonesia Stock Exchange for a five-year period from 2016 to 2020. The sample selection used the purposive sampling method in order to obtain a total of 195 samples that met the specified criteria. This research was tested using Moderated Regression Analysis. The results of this study provide evidence that debt and profitability policies have a positive effect on firm value. Corporate is unable to influence the policy of debt to the value of the company, meaning that corporate governance cannot parse the information asymmetry caused by the policy of debt to corporate value and corporate governance strengthen the influence of profitability on firm value, which means that with the increasing corporate governance can strengthen the effect of profitability on firm value. Key Words:Debt Policy, Profitability, Company Value, Corporate Governance

Suggested Citation

  • Randy Chaidir & Rosidi Rosidi & Wuryan Andayani, 2021. "The effect of policy on debt and profitability with firm values with corporate governance as moderate variables," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(8), pages 39-46, December.
    • Handle: RePEc:rbs:ijbrss:v:10:y:2021:i:8:p:39-46
    DOI: 10.20525/ijrbs.v10i8.1492
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    References listed on IDEAS

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    1. Connelly, J. Thomas & Limpaphayom, Piman & Nguyen, Hien T. & Tran, Thanh D., 2017. "A tale of two cities: Economic development, corporate governance and firm value in Vietnam," Research in International Business and Finance, Elsevier, vol. 42(C), pages 102-123.
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