Examining Firm Value Drivers: An Empirical Analysis of Property and Real Estate Companies on the Indonesian Stock Exchange

Abstract

Aims: This study aims to investigate the impact of company size, leverage, and profitability on firm value using the price-to-book value (PBV) ratio as a proxy, focusing on property and real estate businesses listed on the Indonesia Stock Exchange (IDX). Study Design:  The research adopts a correlational study design. Place and Duration of Study: Indonesian Stock Exchange (IDX) issuers in 2021-2022. Methodology: The study was conducted using data from Indonesian Stock Exchange (IDX) issuers during the years 2021-2022.The population comprised property and real estate businesses listed on the IDX, totaling 161 companies (76 in 2021 and 85 in 2022). The sample was determined through a census method, resulting in 123 valid samples after excluding 38 outlier data points identified through a normality test. Data collection was conducted through documentation, and analysis was performed using multiple linear regression in SPSS 24. Results: The research findings indicate that company size, leverage, and profitability have a significant positive influence on firm value. Conclusion: The study's results provide empirical support for signaling theory, demonstrating that enhancements in company size, leverage, and profitability positively impact firm value.