Role of Profitability In Mediating Institutional And Managerial Ownership Structure On Firm Value

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 11

Year of Publication : 2020

Authors : Heru Prastowo Husodo, IGB Wiksuana

10.14445/23939125/IJEMS-V7I11P106

How to Cite?

Heru Prastowo Husodo, IGB Wiksuana, "Role of Profitability In Mediating Institutional And Managerial Ownership Structure On Firm Value," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 11, pp. 38-45, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I11P106

Abstract:

This study aims to determine the Effect of Institutional Ownership, Managerial Ownership, and Profitability on Firm Value and determine the Effect of Institutional and Managerial Ownership on Profitability and determine profitability's role in mediating Institutional and Managerial Ownership Structures on Firm Value. This research was conducted in Infrastructure, Utility, and Transportation companies listed on the IDX for 2015-2019, with a total sample of 16 companies using the purposive sampling method. The data collection method used was the non-participant observation method. Path analysis techniques are used in this study. The results of the analysis show that Managerial Ownership (MO) and Profitability (ROA) have a positive effect on Firm Value (Tobin's Q), while Institutional Ownership (IO) does not affect Firm Value(Tobin's Q). Institutional and Managerial Ownership has a positive effect on Tobin's Q), Firm Value. Profitability(ROA) can mediate the Effect of Institutional Ownership on Firm Value (Tobin's Q), while Profitability(ROA) is unable to mediate the Effect of managerial ownership on firm value.

Keywords:

Agency Theory, Signalling Theory, Institutional Ownership, Managerial Ownership, Profitability, and Firm Value

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