Examining Firm Value Drivers: An Empirical Analysis of Property and Real Estate Companies on the Indonesian Stock Exchange

Heru Sulistiyo *

STIE Dharmaputra Semarang, Central Java, Indonesia.

Riana Sitawati

STIE Dharmaputra Semarang, Central Java, Indonesia.

Sutono

STIE Dharmaputra Semarang, Central Java, Indonesia.

Sudarman

Unimar AMNI Semarang, Central Java, Indonesia.

*Author to whom correspondence should be addressed.


Abstract

Aims: This study aims to investigate the impact of company size, leverage, and profitability on firm value using the price-to-book value (PBV) ratio as a proxy, focusing on property and real estate businesses listed on the Indonesia Stock Exchange (IDX).

Study Design:  The research adopts a correlational study design.

Place and Duration of Study: Indonesian Stock Exchange (IDX) issuers in 2021-2022.

Methodology: The study was conducted using data from Indonesian Stock Exchange (IDX) issuers during the years 2021-2022.The population comprised property and real estate businesses listed on the IDX, totaling 161 companies (76 in 2021 and 85 in 2022). The sample was determined through a census method, resulting in 123 valid samples after excluding 38 outlier data points identified through a normality test. Data collection was conducted through documentation, and analysis was performed using multiple linear regression in SPSS 24.

Results: The research findings indicate that company size, leverage, and profitability have a significant positive influence on firm value.

Conclusion: The study's results provide empirical support for signaling theory, demonstrating that enhancements in company size, leverage, and profitability positively impact firm value.

Keywords: Size, leverage, profitability, firm value, high income, increasing company, public company


How to Cite

Sulistiyo, Heru, Riana Sitawati, Sutono, and Sudarman. 2024. “Examining Firm Value Drivers: An Empirical Analysis of Property and Real Estate Companies on the Indonesian Stock Exchange”. Asian Journal of Economics, Business and Accounting 24 (6):273-79. https://doi.org/10.9734/ajeba/2024/v24i61360.

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