Research Paper
Year: 2021 | Month: January | Volume: 8 | Issue: 1 | Pages: 509-514
Effect of Good Corporate Governance, Financial Leverage and Firm Size on Firm Value with Profitability as an Intervening Variable (Case Study of Banking Companies Included in the ASEAN Corporate Governance Score Card Country Reports and Assessments)
Muhammad Iqbal Lubis1, Isfenti Sadalia2, Amlys Syahputra Silalahi2
1Postgraduate Students, Department of Management, Faculty of Economics and Business at Universitas, Sumatera Utara, Indonesia
2Postgraduate Lecturer, Department of Management, Faculty of Economics and Business at Universitas, Sumatera Utara, Indonesia
Corresponding Author: Muhammad Iqbal Lubis
ABSTRACT
The purpose of establishing a company in the context of financial management consists of short-term goals, namely achieving maximum profit using existing resources and long-term goals to increase company value. The company's value is used as an indicator of the success of the company's management in managing its current and future business so as to create confidence for investors to invest their capital. The purpose of this study was to determine the effect of good corporate governance, financial leverage, and firm size on firm value with profitability as an intervening variable. The study population consisted of 22 banking companies included in the ASEAN corporate governance score card country reports and assessments with 88 research samples from 2016 to 2019. This type of quantitative descriptive research used path analysis techniques. Based on the results of the analysis conducted, it is found that good corporate governance and firm size have a positive and insignificant effect on profitability, financial leverage has a positive and significant effect on profitability. Good corporate governance and profitability have a positive and insignificant effect on firm value, financial leverage and firm size have a positive and significant effect on firm value. Profitability is able to mediate good corporate governance, financial leverage, and firm size on firm value, but it is not significant.
Keywords: Good Corporate Governance, Financial Leverage, Firm Size, Firm Value, Profitability.
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