2017•IRA-International Journal of Management & Social Sciences (ISSN 2455-2267)Open access

Determinants of Profitability and Firm Value: Evidence from Indonesian Banks

Sutardjo Tui, Mahfud Nurnajamuddin, Mukhlis Sufri, Andi Nirwana

Abstract

This study aims to analyze the effect of intellectual capital, firm size and bank liquidity on profitability and firm value. The experiment was conducted in the banking industry listed in Indonesia stock exchange from 2013 to 2015 as many as 40 banks. Data were analyzed using of Analysis of Moment Structures Ver.22. The results showed (1) intellectual capital has a positive and significant effect on the firm profitability and firm value; (2) firm size have a positive and insignificant effect on the firm profitability and firm value; (3) liquidity has a positive and significant effect on firm profitability, but liquidity have a negative not significant effect on the firm value; and (4) the firm profitability has a positive and significant effect on firm value.

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Key concepts: Profitability index, Market liquidity, Enterprise value, Stock exchange, Business, Monetary economics, Indonesian, Value (mathematics)