The role of enterprise risk management on company value is moderated by company size in coal mining entities listed on the Indonesia stock exchange
Faculty of Economics and Business, University of Widya Gama Mahakam, Samarinda, Indonesia.
Research Article
World Journal of Advanced Research and Reviews, 2024, 23(02), 111–125
Article DOI: 10.30574/wjarr.2024.23.2.2347
Publication history:
Received on 24 June 2024; revised on 31 July 2024; accepted on 02 August 2024
Abstract:
This study seeks to explore and emphasize the impact of Enterprise Risk Management (ERM) on firm value, using Tobin's Q, Price to Book Value (PBV), and Price to Earnings Ratio (PER) as measurement indicators. Additionally, it will analyze how factors such as firm size, Current Ratio (CR), Debt to Assets Ratio (DAR), Total Assets Turnover (TATO), and Return on Assets (ROA) affect these relationships. The research will focus on coal mining companies listed on the Indonesia Stock Exchange (IDX) from 2018 to 2021. The study used multiple linear regression with the ordinary least squares method to analyze the data. Hypothesis testing was performed using the t-test to evaluate the significance of the regression coefficients, with a significance level set at 5 percent. The results show that Enterprise Risk Management (ERM), Debt to Assets Ratio (DAR), and Return on Assets (ROA) significantly positively influence business value. Conversely, Current Ratio (CR), Total Assets Turnover (TATO), and firm size (SIZE) have a significant negative effect on company value. Furthermore, the study found that firm size affects the relationship between Enterprise Risk Management (ERM) and Tobin's Q. Additionally, the results suggest that as ERM, CR, DAR, TATO, ROA, and firm size increase, the company value also rises.
Keywords:
ERM; Firm value; Firm size; CR; DAR; TATO; ROA
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