The Impact of Capital Structure, Company Size, and Good Corporate Governance on Financial Performance and Company Value

Abstract

This study aims to resolve the inconsistencies in prior research regarding the effects of capital structure, firm size, and good corporate governance (GCG) on company value. Additionally, it investigates the moderating role of corporate social responsibility (CSR) in the relationship between financial performance and company value, offering new insights into this dynamic interaction. This study utilizes a saturated sample or census approach, including all population members, due to the small population size and the researcher's ability to access the required data. Data from 71 manufacturing companies listed on the Indonesia Stock Exchange (IDX) between 2018 and 2022 were obtained from their financial statements and annual reports. A quantitative analysis was conducted using Partial Least Square (PLS) regression with the SmartPLS 4.0 software. The results indicate that capital structure, company size, and GCG significantly impact financial performance. Additionally, capital structure was found to significantly affect company value, while company size and GCG did not. Financial performance significantly influenced company value, but CSR did not directly affect company value and did not moderate the relationship between financial performance and company value. 

Keywords: {'name': 'capital structure'}, {'name': 'company size'}, {'name': 'good corporate governance'}, {'name': 'financial performance'}, {'name': 'company value'}, {'name': 'corporate social responsibility'}

Authors & affiliations

Fahmi Mayasari
Affiliation not supplied

Budiyanto
Affiliation not supplied

Nur Fadjrih Asyik
Affiliation not supplied

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