Surabaya — A 2026 study by Pinky Adelia Humairoh Syamsuri and Ambar Kusumaningsih from Universitas Negeri Surabaya finds that profitability, capital structure, and corporate social responsibility (CSR) significantly increase firm value, with managerial ownership strengthening these relationships. Published in the International Journal of Scientific Multidisciplinary Research, the research offers timely insights for investors, companies, and policymakers navigating Indonesia’s evolving capital market.
The findings come as businesses face growing pressure to balance financial performance with social responsibility and transparent governance. Investors are no longer focused solely on profits. They are increasingly evaluating how companies manage risk, allocate capital, and contribute to environmental and social sustainability.
In Indonesia, the consumer non-cyclical sector plays a crucial role in economic stability. Companies in this sector produce essential goods that remain in demand regardless of economic conditions. This makes firm value in the sector particularly important, as it reflects both resilience and long-term growth potential.
The study analyzes financial and sustainability data from companies listed on the Indonesia Stock Exchange between 2022 and 2024. A total of 75 companies were selected, generating 225 firm-year observations. The researchers used a quantitative approach, examining how profitability, capital structure, and CSR influence firm value, while also assessing the moderating role of managerial ownership.
The results reveal a clear and consistent pattern.
Profitability shows a strong positive effect on firm value. Companies with higher earnings tend to attract more investor confidence, leading to better market valuation. Financial performance remains a central indicator for investment decisions.
Capital structure also has a positive impact. Firms that manage the balance between debt and equity effectively are seen as more stable and capable of sustaining growth. This balance signals financial discipline and risk management to investors.
Corporate social responsibility emerges as another key driver. Companies that actively engage in social and environmental initiatives tend to build stronger reputations. This positive image translates into higher trust and improved firm value in the market.
Managerial ownership plays a critical reinforcing role. When company managers hold shares, they are more aligned with shareholder interests. This alignment encourages decisions that prioritize long-term value rather than short-term gains.
Pinky Adelia Humairoh Syamsuri from Universitas Negeri Surabaya explains that combining financial strength with social responsibility is becoming essential in modern business strategy. According to her, companies that integrate profit generation with sustainable practices are better positioned to maintain and increase their value.
Ambar Kusumaningsih from Universitas Negeri Surabaya adds that managerial ownership creates accountability within leadership. When managers have a financial stake in the company, they are more likely to act in ways that benefit the organization as a whole, including its investors.
The implications of this research extend across multiple sectors.
For investors, the study highlights the importance of evaluating companies beyond financial statements. Firms with strong profitability, balanced capital structures, and active CSR programs present more attractive and sustainable investment opportunities.
For businesses, the findings underline the need for a comprehensive approach to value creation. Profit alone is no longer sufficient. Companies must also demonstrate responsible practices, transparency, and effective governance to remain competitive.
For policymakers, the research supports the development of regulations that encourage corporate transparency and sustainability reporting. Strengthening CSR disclosure requirements and promoting managerial ownership structures could help build a healthier investment environment.
The study also reflects a broader global trend. As environmental, social, and governance (ESG) considerations gain prominence, CSR is becoming a key factor in determining firm value. Investors increasingly seek companies that not only deliver financial returns but also contribute positively to society.
This shift signals a transformation in how business success is defined. Long-term value is now closely linked to sustainability, ethical practices, and stakeholder engagement.
Pinky Adelia Humairoh Syamsuri of Universitas Negeri Surabaya emphasizes that improving firm value requires a balanced strategy. Financial performance, responsible business conduct, and aligned management incentives must work together to create sustainable growth.
Ambar Kusumaningsih of Universitas Negeri Surabaya reinforces that companies should view managerial ownership not just as a governance mechanism, but as a strategic tool to enhance decision-making quality and corporate value.
As Indonesia’s capital market continues to grow, these findings provide a practical framework for understanding what drives firm value in a competitive and rapidly changing environment.
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