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November 8, 2025Business Innovation & Entrepreneurship JournalOpen Access

Determinants of Firm Value in the Indonesian Banking Sector: A Study on Profitability, Leverage, and Dividend Policy

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Authors

DRDede Sri RahayuDSDim Zarita SuryanugrahaGNGalih Nugraha

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Overview

Empirical analysis reveals profitability affects firm value in banking, suggesting dividend policy has less influence.

Key Points

  • Firm value is positively influenced by profitability and leverage, highlighting strong economic performance and risk management.
  • Hypothesis testing showed that dividend policy does not significantly impact firm value among Indonesian banks.
  • Panel data regression analysis was conducted on 60 financial entries from 20 Indonesian banks spanning 2021 to 2023.
  • Findings indicate the importance of strategic profitability and leverage decisions in enhancing firm value in the banking sector.

Cite This Study

Rahayu et al. (2025) studied this question.

synapsesocial.com/papers/690e8b75a5b062d7a4e738adhttps://doi.org/10.35899/biej.v7i4.1117
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1The Effect of Profitability, Company Size and Dividend Policy on Firm Value: Evidence from Indonesia’s Banking Sector2025
  2. 2FIRM VALUE IN BANKING SECTOR : THE ROLE OF SIZE, PROFITABILITY, RISK PROFILE, AND DIVIDEND POLICY2025 · 1 citations
  3. 3The Influence of Profitability, Leverage, and Liquidity on Firm Value with Dividend Policy as an Intervening Variable: A Study on Financial Services Companies Listed on the Indonesia Stock Exchange2025
  4. 4Comprehensive Analysis of Debt Policy, Dividend Policy, and Profitability on Firm Value in the Finance Sector2024
  5. 5Factor Analysis That Affect Firm Value (Study On Banking Sector Companies Listed On The Indonesia Stock Exchange (IDX) In 2018-2022)2024