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Effect of profitability and dividend policy on corporate governance and firm value: Evidence from the Indonesian manufacturing Sectors

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  • Tamrin, Muhammad
  • Mus, H. Rahman
  • , Sudirman
  • Arfah, Aryati
  • Sjahruddin, Herman

Abstract

This study aims to analyze the effect of Profitability and Corporate Governance Structure on dividend policy and its impact on the firm value. The population in this research is manufacturing companies listed in Indonesia Stock Exchange as many as 146 companies. The research sample as many as 58 companies, the period of 2013 to 2015. Sampling technique used is purposive sampling. The data analysis technique used is WrapPLS. The results showed that profitability have a negative and significant effect on dividend policy. Profitability has a negative and significant effect on firm value. Profitability is a negative and insignificant effect on firm value as a mediated dividend policy. The structure of corporate governance is positive and significant effect on dividend policy. Corporate governance structure has a positive and significant effect on firm value. Corporate governance structure has a positive and insignificant effect on firm value as a mediated dividend policy. Dividend policy is a positive and insignificant effect on firm value

Suggested Citation

  • Tamrin, Muhammad & Mus, H. Rahman & , Sudirman & Arfah, Aryati & Sjahruddin, Herman, 2017. "Effect of profitability and dividend policy on corporate governance and firm value: Evidence from the Indonesian manufacturing Sectors," OSF Preprints 7m9uk, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:7m9uk
    DOI: 10.31219/osf.io/7m9uk
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    1. Samy Ben Naceur & Mohamed Goaied, 2002. "The relationship between dividend policy, financial structure, profitability and firm value," Applied Financial Economics, Taylor & Francis Journals, vol. 12(12), pages 843-849.
    2. Muhammad Azeem Qureshi & Toseef Azid, 2006. "Did They Do It Differently? Capital Structure Choices of Public and Private Sectors in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(4), pages 701-709.
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    4. Yahya Ali Al-Matari & Abdullah Kaid Al-Swidi & Faudziah Hanim Bt Fadzil & Ebrahim Mohammed Al-Matari, 2012. "Board of Directors, Audit Committee Characteristics and Performance of Saudi Arabia Listed Companies," International Review of Management and Marketing, Econjournals, vol. 2(4), pages 241-251.
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    1. Farouq Altahtamouni & Reem Matahen & Amna Qazaq, 2020. "The Mediating Role of the Capital Structure, Growth Rate, and Dividend Policy in the Relationship Between Return on Equity and Market to Book Value," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(4), pages 155-164, July.

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