The study analyzes the effect of financial digitalization and institutional ownership on firm value, with green finance serving as a mediating variable, focusing on fintech startup companies listed on the Bursa Efek Indonesia during the 2021–2024 period.
Digital
Transformation Does Not Automatically Increase Firm Value
As
digital transformation accelerates across the financial industry, many fintech
companies heavily invest in technological innovation. However, the findings
reveal that financial digitalization does not have a direct significant effect
on firm value.
This suggests that technology adoption alone is insufficient to enhance market valuation. Investors appear to place greater emphasis on governance structures and ownership composition when assessing corporate performance and long-term prospects.
Institutional
Ownership Plays a Crucial Role
The
study finds that institutional ownership has a significant positive effect on
company value. Institutional investors contribute to stronger monitoring
mechanisms, improved transparency, and enhanced corporate credibility.
A higher proportion of institutional ownership tends to strengthen investor confidence, ultimately supporting firm valuation in capital markets.
Green
Finance as a Mediator
Although
financial digitalization positively influences the implementation of green
finance initiatives, green finance itself does not significantly affect company
value and does not mediate the relationship between digitalization,
institutional ownership, and firm value.
This indicates that sustainability initiatives must be strategically integrated and substantively implemented to generate measurable market impact.
Strategic
Implications
The
research highlights several important implications for fintech companies in
Indonesia:
- Digital innovation must be accompanied
by strong corporate governance.
- Institutional investors play a strategic
role in enhancing firm value.
- Sustainability practices should move
beyond symbolic compliance toward measurable impact.
This study contributes to the growing body of literature on digital finance, corporate governance, and sustainable finance in emerging markets.
Author
Information
Ichtiara
Khaira
Sri Marti Pramudena
Universitas Mercu Buana
Research
Source
Khaira,
I., & Pramudena, S. M. (2026).
Published in the Asian Journal of Applied Business and Management (AJABM),
Volume 5, Issue 1, February 2026.
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