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Capital Structure, Business Risk and Company Value with Firm Size as a Moderating Variable: Empirical Evidence from Pharmaceutical Companies in Indonesia Anisah, Anisah; Murad, Moh. Ali; Asriadi, Asriadi; Samudra, Suryadi; Magfirah, Dilah
Budapest International Research and Critics Institute-Journal (BIRCI-Journal) Vol 5, No 4 (2022): Budapest International Research and Critics Institute November
Publisher : Budapest International Research and Critics University

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.33258/birci.v5i4.7180

Abstract

This study investigates the extent to which firm size can strengthen or weaken the relationship between capital structure and business risk in inducing firm value. This study uses panel data from ten pharmaceutical companies sourced from the company's annual reports for 2015-2021. The data analysis technique used the Structure Equation Modeling (SEM) method through the Partial Least Square (PLS) approach with WarpPLS 6.0 software. This study found that capital structure had no effect on firm value, while business risk had a significant negative effect on firm value. Firm size is only able to moderate the relationship between capital structure and firm value. Thus, in order to maximize the value of pharmaceutical companies in Indonesia, the main concern of managers is to ensure that the amount of income received by the company remains stable in order to avoid income volatility that can trigger increased business risk for the company. In addition, it is also necessary to consider the size of the company when you want to make a policy to determine how much debt or equity is used to finance the company so that maximizing the value of the company can be achieved. 
Co-Authors Abdul Aziz Abdul Malik Abrar , Tajul Achyar, Novriyanti Adfiyani Fadjar Adhi Purnomo Adi, Nelfia Afib Rulyansah Afrilia Fatmawati, Della Agustin, Kurnia Dwi Agustina Rahmawati Ahmad Syahrizal Ahmad, Adi Ahmad, Nur Sulfana Ahyarti, Arya Ahyarti, Ayra Aisyah Aisyah Aji, Difangga Prasetyo Akkas, Muhammad Fauzi Mustaqim Al Fathan, Aditya Rifqi Al-Aksari, Sirajuddin Alaksari, Sirajudin Alfharijy, Muhammad Daffa Alfiah, Nurul Rahma Alfina, Alfina Ali Imron Alirahman, Agus Dian Alkadri, Hanif Alwi, Miftahul Jannah Amelia, Vira Amri Amin Andini, Andini Andora, Dona Anggriany, Nissa Anisyah, Nur Annisa Annisa Antoni, Ryan Satria Anugrah, M David Aprilin, Ririt Ardila Yunita Ari Amir Alkodri Arie Anggraini Arie Bowo, Ferdian Aries Suharso Arni Sasnita, Novetri Asriadi Asriadi AULIA, YENNI Ayu Ningrum, Tia Ayu, Milda Ayudia Cipta Khairani Azzuhry , Haikal Badruddin, M Fuad Baehaqi Baiq Dewi Sukma Septiani Bambang Adiwinoto Beuty, Sarah Bilhuda, Asra Binar Asrining Dhiani Bowo, Ferdian Arie boy, la Budi Aji, Budi Budi Heru Santosa Budiono, Herlina Busman Busman, Busman Chairina Nasir Chairunissa, Dina Chandra Kirana Chandra Kirana Chandra, Nadya Febiani Christina Catur Widayati Cici Rianty K. 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