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Vol. 6 No. 7 (2023): American Journal of Economics and Business Management

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Factors Affecting the Value of Manufacturing Sector Companies Listed on the Indonesia Stock Exchange in 2017-2021

Benny Oloando Tampubolon
Master of Management Study Program, Faculty of Economics and Business, Sam Ratulangi University
Sri Murni
Master of Management Study Program, Faculty of Economics and Business, Sam Ratulangi University
Joubert B. Maramis
Master of Management Study Program, Faculty of Economics and Business, Sam Ratulangi University

American Journal of Economics and Business Management, Vol. 6 No. 7 (2023): American Journal of Economics and Business Management

Abstract

In addition to being an important factor seen by stakeholders, current company value also has specific long-term interests using fundamental analysis methods such as financial ratios. Increasing the value of the company will affect the increase in the welfare of shareholders. However, the separation between shareholders and company managers has limited shareholders from supervising management as company managers to provide added value where management has the nature or desire to benefit itself. This conflict between the agent and the principal is called the agency problem (agency cost) where this conflict of interest creates costs for monitoring, observing, and ensuring management has acted in accordance with the interests of shareholders. Institutional mechanisms are needed to overcome agency problems, namely Good Corporate Governance, namely a system that regulates and controls companies in order to create added value for stakeholders. The sample in this study were 66 manufacturing companies listed on the IDX during 2017-2021 using path analysis. The results show that the proportion of independent commissioners and the proportion of institutional ownership has a significant positive effect on profitability, the proportion of independent commissioners has no effect on firm value, the proportion of institutional ownership has no significant positive effect on firm value, and profitability has a significant positive effect on firm value.

Keywords

Proportion of Independent Commissioners Proportion of Institutional Ownership Profitability Company Value
Benny Oloando Tampubolon, Sri Murni, & Joubert B. Maramis. (2023). Factors Affecting the Value of Manufacturing Sector Companies Listed on the Indonesia Stock Exchange in 2017-2021. American Journal of Economics and Business Management, 6(7), 94–112. Retrieved from https://globalresearchnetwork.us/index.php/ajebm/article/view/2341
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