3 minute read
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
The Effect of Firm Size on Firm Value
Based on research findings, the variable firm size has a significant p-value of 0.111. Because the significance value of the p-value is less than 0.05 (0.111> 0.05). Then Ho is rejected, which shows that the firm size variable has no direct effect. Firm size as measured by the total assets owned by the company does not directly affect the value of the company. Company management must consider the size of the assets owned to be able to increase the value of the company by considering the profit that the company gets (Tassia, RA, & Fidiana, F : 2019). This finding support the findings Indrajaya and Setiadi (2011), Khafa and Laksito (2015) state not influence firm size effect on firm value.
Advertisement
The Impact of Covid-19 on Firm Value
Based on the research findings, the impact variable covid-19 has a significant p-value of 0.624. Because the significance value of the p-value is less than 0.05 (0.624> 0.05). Then Ho is rejected, which shows that the impact Covid-19 variable has no direct effect. The Firm value is not directly affected by the covid-19 pandemic. During the pandemic that occurred in the last two years, it did not significantly affect the value of banking companies because banks already had the public's trust in saving funds or investors in investing their funds.
The Effect of Financial Performance on Firm Value
Based on the research findings, the variable Financial Performance has a significant p-value of 0.034. Because the significance value of the p-value is less than 0.05 (0.034> 0.05). Then Ho is accepted, which indicates that the financial performance variable has a direct influence. One of the main reasons companies operate is to generate profits that benefit shareholders. The measure of the success of achieving this reason is that the greater the ROE reflects the company's ability to generate high profits for shareholders. Apart from being an indicator of the company's ability to fulfill obligations to funders, it is an element in creating high corporate value. shows the prospects of the company in the future. The low quality of earnings will make the decision-making mistakes of users such as investors and creditors so that the value of the company decreases. The better the financial performance, the better the Firm value. This finding support the findings Arief, et al (2015) and Patricia (2018) state financial performance has a significant effect on firm value.
The Effect of Good Corporate Governance Mechanisms on Firm Value through Financial Performance
`Based on the path analysis of the direct influence of the independent board of commissioners variable on firm value is 0.045. While the indirect effect of the independent board of commissioners variable on firm value and financial performance is (0.045 x -0.193 = -0.0086). The direct effect of the independent board of commissioners on firm value is greater than the indirect effect (0.045 > -0.0086), and the calculation using the Sobel test for the z value obtained is 0.016 < 1.96, so it can be concluded that financial performance cannot yet mediate the relationship between the board of commissioners independent and firm value.
Based on path analysis the direct influence of the audit committee variable on firm value is 0.088. While the indirect effect of the independent audit committee variable on firm value and financial performance is (0.088 x0.193 = -0.0169). The direct effect of the audit committee on firm value is greater than the indirect effect (0.045>-0.0169), and the calculation using the Sobel test z value obtained is -0.179 < 1.96, it can be concluded that financial performance cannot yet mediate the audit committee relationship and firm value.
Based on the path analysis, the direct effect of the audit quality variable on firm value is -0.183. The direct effect of audit quality on firm value is greater than the indirect effect (-0.183 > 0.0353), and the calculation using the Sobel test z value obtained is 0.787 < 1.96, it can be concluded that financial performance cannot yet mediate the relationship between audit quality and the firm value.
Based on the path analysis, the direct influence of the board of directors variable on firm value is 0.222. While the indirect effect of the board of directors variable on firm value and financial performance is (0.222 x -0.193 = -0.0428). The direct effect of the board of directors on firm value is greater than the indirect effect (0.222>0.0428), and the calculation using the Sobel test z value obtained is -0.441 < 1.96, it can be concluded that financial performance cannot yet mediate the relationship between the board of directors and firm value. So, the variable good corporate governance mechanism with the four proxies for firm value cannot be mediated by financial performance. This finding support the findings ward (2013), Aziz (2016).
The Effect of Liquidity on Firm Value through Financial Performance
Based on the path analysis, the direct influence of the Liquidity variable on firm value is 0.222. Meanwhile, the indirect effect of the liquidity variable on firm value and financial performance is (0.222 x0.193 = 0.0308). The direct effect of liquidity on firm value is greater than the indirect effect (0.222 > 0.0308), and the z value calculated using the Sobel test is 0.416 < 1.96, so it can be concluded that financial performance cannot yet mediate the relationship between liquidity and firm value.
