Effect of Leverage and Firm Size on Company Value With Exchange Rate and Hedging Decision as Moderation Variable (Case Study on Non-Financial Companies Listed on Indonesia Stock Exchange Period 2017-2018)

Abstract

In general, the value of a company is a description of the condition of the company, whether it is in good condition or not. In this research, exchange rates and hedging are moderating variables for various variables that affect company value, namely leverage and firm size variables. The purpose of this research is to determine the effect of each variable on firm value in non-financial companies on the Indonesia Stock Exchange in 2017-2018. The sampling technique used was purposive sampling with the amount of 285 companies. The research hypothesis was tested by using the Structural Equation Model (SEM) approach based on Partial Least Square (PLS). The results show that the exchange rate can moderate the leverage and firm size on firm value, hedging cannot moderate the leverage but can moderate the firm size on firm value.

Capital structure, profitability, hedging policy, firm size, and firm value: Mediation and moderation analysis

“…To limit the risk of loss due to variations in foreign currency exchange rates, the company must implement a hedging policy approach to decrease exposure and other risks that may affect currency values in financing activities, damaging the company's value. The larger capital structure, which is matched with hedging measures, is projected to reduce risk and boost profitability, resulting in increased firm value (Siswanto & Promalessy, 2021).…”

Capital Structure, Profitability, Hedging Policy, Firm Size, and Firm Value: Mediation and Moderation Analysis

“…To limit the risk of loss due to variations in foreign currency exchange rates, the company must implement a hedging policy approach to decrease exposure and other risks that may affect currency values in financing activities, which will in turn damage the company's value. The larger capital structure, which is matched with hedging measures, is projected to reduce risk and boost profitability, resulting in increased firm value [34].…”

Moderasi Ukuran Perusahaan kepada Pengaruh Utang Perusahaan dan Profitabilitas Perusahaan terhadap Nilai Perusahaan

“…Hal ini akan mempengaruhi nilai perusahaan. Hasil penelitian (Toni et al, 2022), (Siswanto et al, 2021) menyatakan bahwa utang perusahaan/leverage berpengaruh signifikan terhadap nilai perusahaan. Hasil penelitian berbeda dari (Wilsen & Stella, 2022), (Ispriyahadi & Abdulah, 2021), (Welly et al, 2019) menyatakan bahwa utang perusahaan/leverage tidak berpengaruh signifikan terhadap nilai perusahaan.…”

“…Hasil penelitian ini sejalan dengan hasil penelitian (Wilsen & Stella, 2022), (Ispriyahadi & Abdulah, 2021), (Welly et al, 2019). Terdapat hasil penelitian terdahulu yang berbeda, yaitu hasil penelitian (Toni et al, 2022), (Siswanto et al, 2021). Perbedaan hasil-hasil penelitian dimungkinkan karena adanya perbedaan objek penelitian, yaitu variabel-variabel yang mempengaruhi nilai perusahaan, jenis industri dan tahun amatan penelitian.…”