The Effect of Growth and Systematic Risk on the Firmâ€™s Value: Profitability as a Mediating Variable

Mulyanto Nugroho; Abdul Halik

doi:10.14414/jebav.v23i3.2468

Vol. 23 No. 3 (2020), Articles

Vol. 23 No. 3 (2020)

The Effect of Growth and Systematic Risk on the Firmâ€™s Value: Profitability as a Mediating Variable

Articles

DOI: 10.14414/jebav.v23i3.2468

Published 31-03-2021

Mulyanto Nugroho⁺⁻
Abdul Halik⁺⁻

Mulyanto Nugroho

Universitas 17 Agustus 1945 Surabaya

Abdul Halik

Universitas 17 Agustus 1945 Surabaya

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Keywords

Growth
systematic risk
profitability
firm value

How to Cite

Nugroho, M., & Halik, A. (2021). The Effect of Growth and Systematic Risk on the Firmâ€™s Value: Profitability as a Mediating Variable. Journal of Economics, Business, and Accountancy Ventura, 23(3), 466-476. https://doi.org/10.14414/jebav.v23i3.2468

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Abstract

This research aimed to examine the impact of growth and systematic risk on company value, mediated by profitability in insurance companies listed on the Indonesia Stock Exchange (IDX). There are 88 companies in the financial sector in the insurance sub-sector listed on the IDX. They were taken as the population by using the purposive sampling technique. The sample of this study consisted of fourteen insurance companies. The data is analyzed using partial least square structural equation modeling (PLS-SEM). It was found that growth has a significant positive effect on profitability, and profitability has a significant positive effect on firm value. It means that profitability fully mediates the effect of growth on firm value. On the contrary, growth does not have a significant direct effect on firm value. Systematic risk has no significant effect on profitability and firm value. These findings are expected to have a good impact on investors and firmsâ€™ managers in Indonesia by looking at the growth and its impact on current corporate values.

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The Effect of Growth and Systematic Risk on the Firmâ€™s Value: Profitability as a Mediating Variable

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