Investment decisions, financing and dividends to increase firm value: a case study of manufacturing companies in Indonesia

Economic Annals-ХХI: Volume 194, Issue (11-12), Pages: 67-72

Citation information:
Meutia, R., Apridar, Mursidah, Mastuti, R., & Fuad, M. (2021). Investment decisions, financing and dividends to increase firm value: a case study of manufacturing companies in Indonesia. Economic Annals-XXI, 194(11-12), 67-72. doi: https://doi.org/10.21003/ea.V194-08

Rita Meutia
PhD (Economics),
Associate Professor,
Faculty of Economic and Business,
Syiah Kuala Darussalam University
Banda Aceh, Indonesia
rita.mutia@unimal.ac.id
ORCID ID: https://orcid.org/0000-0002-7621-8204

Apridar
PhD (Economics), Professor,
Faculty of Economics and Business,
Syiah Kuala Darussalam University
Banda Aceh, Indonesia
apridar@unmal.ac.id
ORCID ID: https://orcid.org/0000-0001-6105-6014

Mursidah
MА (Economics),
Lecturer,
Faculty of Economics and Business,
Malikussaleh University
Lhokseumawe, Indonesia
Mursidah@gmail.com
ORCID ID: https://orcid.org/0000-0002-8708-1063

Rini Mastuti
PhD (Agribusiness),
Lecturer,
Program of Study Agribusiness,
Samudra University
Jl, Prof. Dr. Syarief Thayeb, Meurandeh, Langsa Lama, Langsa City, Aceh, 24416, Indonesia
rinimastuti@unsam.ac.id
ORCID ID: https://orcid.org/0000-0003-4791-2659

Muhammad Fuad
PhD (Economics),
Lecturer,
Program of Study Management,
Samudra University
Jl, Prof. Dr. Syarief Thayeb, Meurandeh, Langsa Lama, Langsa City, Aceh, 24416, Indonesia
muhammadfuad@unsam.ac.id
ORCID ID: https://orcid.org/0000-0002-3971-070X

Investment decisions, financing and dividends to increase firm value: a case study of manufacturing companies in Indonesia

Abstract. This study aims to determine the direct relationship of firm value with investment decisions, funding, dividends, and agency costs. The method used in this research is descriptive. The object under study is the manufacturing companies listed on the Indonesia Stock Exchange IDX during 2008-2017, totalling 108 companies. Data was collected using a survey method on cross-sectional and time-series data. The data analysis method used the Partial Least Square (PLS) technique. Tobin’s Q is used as a parameter of firm value. CAP/BVA as an investment decision parameter, DER as a funding decision parameter, DPR as a dividend decision parameter, and FCF as an agency cost parameter. The results directly influence the model that investment decisions, funding decisions, dividend decisions, and agency costs positively affect firm value. The indirect impact states that agency costs significantly mediate the relationship between investment decisions, funding decisions, and dividends on firm value.

Keywords: Company Performance; Investment Decisions; Financial Decisions; Dividend Decision; Agency Costs

JEL Classifications: A10; A30; D40; D78

Acknowledgements and Funding: The authors received no direct funding for this research.

Contribution: The authors contributed equally to this work.

Data Availability Statement: The dataset is available from the authors upon request

DOI: https://doi.org/10.21003/ea.V194-08

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Received 16.07.2021
Received in revised form 19.08.2021
Accepted 29.08.2021
Available online 27.12.2021