The Effect of Profitability and Ownership Structure on Firm Value with the Mediation of Capital Structure in Banking Companies in Indonesia

Abstract

This study aims to analyze the effect of profitability on the capital structure of banking companies, analyze the effect of ownership structure on the capital structure of banking companies, analyze the effect of profitability on the value of banking companies, analyze the effect of ownership structure on the value of banking companies, analyze the effect of profitability on firm value through the capital structure of banking companies, analyze the effect of ownership structure on firm value through the capital structure of banking companies. The population in this study are banking companies that have been listed on the Indonesia Stock Exchange in the period 2021 to 2023. The sampling technique used in this study is purposive sampling technique. Based on these criteria, a sample size of 11 banks was obtained, so that the number of observations was 11 x 3 years = 33 observations. The data analysis technique uses path analysis. The analysis shows that profitability affects the capital structure. Ownership structure has no effect on capital structure. Profitability has a significant influence on firm value. Institutional ownership structure has a significant influence on the value of banking companies. Capital structure has no effect on banking value, which means that the high and low capital structure has no impact on firm value. Capital structure fails to mediate the effect of profitability on banking value. Capital structure fails to mediate the effect of institutional ownership structure on banking firm value.