Influence of Firm Size, Profitability and Geographic Location Government Owned Firms on Firm Value: A Study on Indonesia Banking Sector

Abstract

The purpose of this study was to examine the effect of profitability and company characteristics, namely; company size and geographic location such that in some areas firms are jointly owned by the government as well along with the price to book value (PBV), the banking sector on the IDX. To achieve the research objectives, 81 research data were used as research samples, the observation period was 2017 to 2019 from 27 banks. All research data obtained from financial statements. Multiple regression model is used to test the relationship between research variables. From the results of data processing, this study found that profitability (ROA) and firm size (total assets) had a positive effect on firm value of PBV. Meanwhile, research cannot prove that geographic location can affect firm value (PBV). These results prove that profitability and company size have become important factors in stock investment in the Capital Market.