Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 02 March 2020

The Influence of Investment Decisions and Funding Decisions on the Value of Companies with Ownership Structure as Moderated Variables in Manufacturing Companies Listed in Indonesia Stock Exchange (BEI)

Aqimissolati, Sulastri, Isnuhardi, Agustina Hanafi

Sriwijaya University, Indonesia

Download Full-Text Pdf

10.31014/aior.1992.03.01.201

Pages: 328-343

Keywords: Current Asset to Total Assets, Fixed Asset to Total Assets, Debt Equity Ratio, Institutional Ownership, Multiple EVs

Abstract

Introduction: This study examines the effect of investment decisions and funding decisions on firm value with institutional ownership as a moderating variable. In this study, investment decisions are measured by Current Asset to Total Assets (CATA) and Fixed Assets to Total Assets (FATA) while funding decisions are measured by Debt Equity Ratio (DER), institutional ownership is measured by (INST) and company value is measured by EV / EBITDA. Purpose: Analyzing the influence of investment decisions and funding decisions on the company's value in the manufacturing sector listed on the Indonesia Stock Exchange in 2014-2017. Results: The results showed that there was a positive and significant effect between CATA and DER on EV / EBITDA, while FATA had no effect on EV / EBITDA. Conclusions: The study was conducted on companies listed on the Indonesia Stock Exchange in the period 2014 to 2017. This study used as many as 87 manufacturing companies that met the criteria of sampling. This study was analyzed using multiple regression analysis and interaction tests and study also found that INST can strengthen the relationship between CATA and EV / EBITDA, weaken the relationship of DER and EV / EBITDA, and INST does not moderate the relationship between FATA and EV / EBITDA. The results of this study can be used by investors as a material consideration in terms of investment decisions and funding decisions, especially in manufacturing companies in Indonesia. Investors can choose a company that has good financial decisions and an appropriate portion of institutional ownership.

References

  1. Abeysekera, I. and Guthrie, J. 2015, “An empirical investigation of annual –in Sri Lanka”, Critical Perspectives on Accounting, Vol. 16 No. 3, 151-63
  2. Almquist, E., & Roberts, K. J. 2000. A “mindshare” manifesto. Mercer Management Journal, (12), 9–20.
  3. Arby, Hanadi Fanny. 2015. Struktur Kepemilikan, Tipe Kepemilikan an Nilai Perusahaan : Studi Empiris di Bursa Efek Indonesia. Tesis Program Pascasarjana Universitas Gadjah Mada.
  4. Arikunto,S. 2015. Metodelogi Penelitian (edisi revisi). Yogyakarta. Bina Aksara
  5. Arikunto, Suharsini. 2015. Prosedur penelitian suatu pendekatan praktik. Jakarta. Aneka Karya
  6. J. Christopher Hughen, Peter P. Lung. 2017. The Impact of Not Amortizing Intangible Assets on Valuation Multiples. Pacific Accounting Review.
  7. Jensen, M.C and Meckling, W.H. 1976. Theory of the form managerial  behavior agency cost and ownership structure.
  8. Jogiyanto, Hartono, 2018, Teori Portofolio dan Analisis Investasi, Edisi Pertama, BPFE Yogyakarta, Yogyakarta.
  9. Kusumajaya. 2013. Pengaruh struktur modal dan pertumbuhan perusahaan terhadap profitabilitas dan nilai perusahaan pada perusahaan manufaktur di BEI. Tesis Program Pascasarjana Universitas Indonesia.
  10. Lobo Byron Y. Song. 2017. Investment Decisions and Bank Loan ContractingWenxia Ge Tony Kang Gerald. Asian Review of Accounting.
  11. Lee, C. Rosentein, SN, Rangan, dan Davidson. 1992. Board Composition and Shareholder Wealth: The Case of Management Buyout. Financial Management 21:58-72
  12. Miller, M.H. 2012. Debt and taxes. Journal of Finance, 32:261-275.
  13. Modigliani, F. & Miller, M. 1958. The cost of capital, corporation finance, and the theory of investment. American Economic Review, 48:655-669.
  14. Modigliani, F. & Miller, M.H. (2013). Corporate income taxes and the cost of capital: a correction. American Economic Review, 53:433-443
  15. Myers S.C. 2012. The capital structure puzzle. The Journal of Finance, 39(3).
  16. Myers S. & Majluf, N. 1984. Financing decisions when firms have investment information that investors do not. Journal of Financial Economics, June:187-220.
  17. Norman Wong. 2017. Risk management in student-managed funds: Earnings announcements and the collar strategy. Managerial Finance.
  18. Papers and Proceedings, 42nd Annual Meeting, American Finance Association, San Francisco, Calif, December 28-30, 1983 (July 1984):575-592.
  19. Sartono, Agus. 2013. Manajemen Keuangan. Edisi Keempat BPFE : UGM Yogyakarta
  20. Statistics South Africa. 2018. Historical CPI indices. Pretoria: Statistics SouthAfrica. http://www.statssa.gov.za. Accessed: 15 January 2019.
  21. Sugiyono. 2013. Metode Penelitian Kuantitatif Kualitatif dan R&D. Bandung: Alfabeta
  22. Tandelilin, E, 2012, Analisa Investasi Dan Manajemen Portofolio, Edisi Pertama, BPFE, Yogyakarta.
  23. www.idx.co.id.

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Stay Connected

  • Instagram - Black Circle
  • Facebook - Black Circle
  • LinkedIn - Black Circle

Contact Us

Please send all inquiries to the email:

editorial@asianinstituteofresearch.org

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved