Jurnal Aplikasi Bisnis dan Manajemen (JABM) E-Journal
Vol. 11 No. 3 (2025): JABM Vol. 11 No. 3, September 2025

Firm Size and Firm Value in Manufacturing Companies Listed on The Indonesia Stock Exchange: Does Profitability Mediate The Relationship?

Lestari, Elly (Unknown)
Setyawati, Yuni (Unknown)
Indah, Sri (Unknown)
Hirdinis, Hirdinis (Unknown)
Goncalves, Manuel (Unknown)



Article Info

Publish Date
25 Sep 2025

Abstract

Background: Firm value is a measure of an investor's opinion of a business's overall performance and is frequently directly related to stock prices. Increased market trust in the company's future potential as well as its present performance might result from a strong firm value.Purpose:  Research objective is to confirm the effect of company size -listed on the Indonesia Stock Exchange within the manufacturing sector- on the firm value. Furthermore, this study also investigate the role of profitability as an intervening factor. Design/methodology/approach: The focus of the investigation is on the manufacturing firms that have disclosed their financial reports up to the year 2018. To ensure a comprehensive sample for research purposes, we selected a saturated sample of 14 firms from this population, resulting in 98 observations. Path analysis is employed to test the hypotheses. Finding/Result: The research findings indicate that company size exerts both a direct and indirect influence on firm value, with profitability acting as a moderating factor in this relationship. Specifically, an increase in profitability has a positive impact on a company's value. Conclusion: The size of a business can enhance investor confidence, as larger companies are typically more visible and accessible sources of information, and” they have the potential to achieve greater profitability, consequently contributing to their overall value.Originality/Value: Profitability acts as a crucial mediator that enhances our understanding of how firm size influences firm value. Keywords: firm size, profitability, firm value, Indonesia Stock Exchange, manufacturing companies

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Journal Info

Abbrev

jabm

Publisher

Subject

Decision Sciences, Operations Research & Management

Description

Journal of Business and Management Application (JABM) published articles in the field of business and management applications such as business strategy management, financial management, human resources and organization, business value chain and other issues in the field of business and management. ...