The Strategic Role of Innovation as a Mediator Between Internal Firm Factors and Value Creation: : A Study of the Indonesian Manufacturing Industry

Prihat Assih (Accounting Department, Faculty of Economics and Business, Universitas Merdeka Malang)
Diyah Sukanti Cahyaningsih (Accounting Department, Faculty of Economics and Business, Universitas Merdeka Malang)
Kanitsorn Terdpaopong (Accounting Study Program, Rangsit University)

AKRUAL: Jurnal Akuntansi
Vol 17 No 2 (2026): AKRUAL: Jurnal Akuntansi (In Progress)

Introduction/Main Objectives: This study analyzes the role of innovation in bridging factors that influence firm value. As is known, COVID-19 has triggered manufacturing companies to innovate both processes and products. Methods: This study places the innovation variable as an intervening variable to examine whether companies with adequate profitability, assets, managerial ownership, and determinants of R&D activities can drive firm value. The sample in this study was 132 manufacturing companies with an observation period of 2021-2024. Finding/Results: The results of this study show that the role of managerial ownership influences corporate innovation. Firm size hurts innovation, and the ability to generate profits in period t-1 can drive innovation in period t. Firm value is proven to be influenced by managerial ownership, size, profitability, and innovation. Innovation can also act as an intervening variable. Conclusions: This study contributes a discourse that the role of innovation in manufacturing companies is quite significant. Government encouragement can increase R&D activities. Thus, manufacturing companies should consider R&D activities, which are a positive signal for investors.