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American Journal of Humanities and Social Sciences Research (AJHSSR) 2023
from The Influence of Good Corporate Governance Mechanisms, Liquidity, Firm Size, and Impact of Covid-19
sample using purposive sampling. So that a sample of 35 banking companies in every year was obtained that met the research criteria with a period of 5 years or in other words there were 175 samples used in the study.
Metodology Analysis
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The regression analysis approach is used in this study. Calculations use statistical methods, which are assisted by SPSS v.26 software. In this research, descriptive analysis and path analysis were carried out. Multiple liniar regression analysus uses the following regression equation:
Description:
ROE = Financial Performance
DKI = Independent Board of Commissioners
KoA = Audit Committee
KuA = Audit Quality
DD = Board of Directors
LDR = Liquidity
SIZE = Firm Size
DC = Impact of Covid-19
NP = Firm Value
1,2,3,4,5 = Regression Coefficient e = errors
Variable Measurements
The independent variables in this study are Good Corporate Governance Mechanisms (GCG), Liquidity (LDR), Firm Size (SIZE), and Impact of Covid-19 (DC). The dependent variable in this study is Firm Value (NP) and the mediation variable is Financial Performance (ROE).
Good Corporate Governance Mechanisms (GCG) is measured by four proxies, namely the independent commissioners, audit committee, audit quality, and board of directors. First, Independent Board of Commissioners (DKI) measured with the percentage of the number of independent board of commissioners to the total number of commissioners in the sample company’s board of commissioners. Second, Audit Committee measured with the percentage of the number of audit committees other than independent commissioners to the total audit committees in the sample companies. Third, Audit Quality measured with a dummy variable with a value of 1 if audited by a Big 4 Auditor and a value of 0 if not audited by a Big 4 Auditors. And the last, Board of Directors measured with the percentage of the number of director to the total board of directors in the sample companies.
Liquidity (LDR) is measured by the loan to deposit ratio (LDR). The formula for the loan to deposit ratio (LDR) is:
LDR = (Credit grated) / (funds received) x 100%
Firm Size (SIZE) is scale where companies can be classified according to various ways, including total assets, log size, market value of shares, and others. Firm size can be measured by Ln (total assets). The Impact of Covid-19 (DC) is measured using a dummy variable with the following provisions: Value 1, if during the covid-19 pandemic and a value of 0 if before the covid-19 pandemic.
Firm Value (NP) in this study is calculated using the Tobin’s Q ratio. The Tobin’s Q formula is used are (Rahman et.al, 2015):
Tobin’s Q= (MVE + DEBT) / TA
Where : MVE is the market value of equity (MVE = closing price of shares at the end of year x number of shares outstanding at the end of year), DEBT is total debt, and TA is total assets.
Financial Performance (ROE) in this study calculated using Return on Equity (ROE). Return on Equity (ROE) is the ability of own capital to generate profits for preferred or ordinary shareholders. ROE can be calculated by the formula:
ROE = (Net Profit) / (Total Equity)
