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The effect of environmental social governance (ESG) performance, capital structure, and firm size on firm value mediated by profitability on ESG leaders index in IDX

Author

Listed:
  • Bayu Setioko

    (Univesity of Brawijaya)

  • Moeljadi

    (University of Brawijaya)

  • Andarwati

    (University of Brawijaya)

Abstract

Firm value is a very important because the success of management in managing a firm is reflected in the firm value. With the uncertainty of global economic conditions in recent years, Companies have faced challenges in maintaining or increasing firm value. Companies must have a strategy in order to increase the firm value by paying attention to financial and non -financial factors. This study aims to test and analyze the effect of ESG performance, capital structure, firm size on firm value with profitability as a mediation variable. Sampling techniques in this study uses saturated sample because all populations included in the sample criteria that used in research as many as 15 companies listed in the ESG Leaders index for the 2020-2023 period. Research data analysis using multiple linear regression methods and path analysis with SPSS programs. The results showed that ESG's performance, capital structure had a significant positive effect on firm value while firm size had a significant negative effect on the firm's value. Profitability as a mediation variable could mediate the effect of ESG performance, capital structure, firm size on the firm value. Key Words:ESG Performance, Capital Structure, Firm Size, Profitability, Firm Value

Suggested Citation

  • Bayu Setioko & Moeljadi & Andarwati, 2024. "The effect of environmental social governance (ESG) performance, capital structure, and firm size on firm value mediated by profitability on ESG leaders index in IDX," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(8), pages 14-25, November.
    • Handle: RePEc:rbs:ijbrss:v:13:y:2024:i:8:p:14-25
    DOI: 10.20525/ijrbs.v13i8.3905
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