Moderating the Effects of Company Value’s Determinants of Oil Palm Estate Companies

Jhonni Sinaga

Abstract


The goals of this study are to test and obtain the empirical evidences of the impacts of capital structure, firm growth, and profitability on firm value with dividend policy as moderator. This study uses the data from quarterly financial statements, annual reports, sustainability reports, and other reports of oil palm plantation companies listed in the Indonesian Stock Exchange (IDX) in the years of 2009 - 2017. There are only 5 companies from the 16 companies listed that meet the given criteria for the analysis. The research results confirm that the negative and highly significant influence of capital structure on the company value during the instable global economy pointed out by the downward trend sales price of crude palm oil (CPO) can be mitigated to be positive and significant by increasing the dividend payment consistently toward the optimal stage. The weakly significant indirect impact of capital structure on the firm value through the company growth can also be leveraged into significant by implementing the same approach. This approach can also leverage the insignificant impact of company growth on the company value into significant. Taking into account the marginal benefits and costs of using the long term bank loan or bond in financing the company operation becomes more and more decisive as a result of the long investment period. The company growth’s stimulation on the profitability is not responded by the investors and makes the influence of the profitability on the company value negative and highly significant. The company growth and profitability mediate the direct effect of capital structure on the company value weakly significantly and the both function as partial mediation. The company growth does not mediate the direct influence of capital structure on the profitability and the profitability does not mediate the direct effect of company growth on the company value.


Keywords


Capital Structure, Company Growth, Profitability, Company Value, and Dividend policy.



DOI: http://dx.doi.org/10.18533/journal.v8i11.1770

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