The firm’s value empirical models in automotive and components subsectors enterprises: Evidence from developing economy

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Abstract

Individuals and organizations cannot avoid the era of the Fourth Industrial Revolution (Industry 4.0) in any part of the world by utilizing the latest technological bases. These transformations will change the way humans live and interact in the future. Enterprise decisions are taken and become the most important from the firm’s value empirical models. This study aims to establish the implications of an empirical model of a firm’s value through some determinant factors, i.e., financial ratios with profitability and leverage, intellectual capital with human capital employment, the dividend policy, and audit quality with Big 4 category proxy. The research uses a causal-comparative type with a quantitative approach. Eleven final samples of automotive and components subsectors enterprises of the listed shares in Indonesian Stock Exchange (IDX) were appointed, from 2013 till 2019 by purposive sampling technique. Multiple regression was applied to analyze data on the proposed equation models. The findings state that the profitability and audit quality has positive significance, but leverage, intellectual capital, and dividend policy insignificant implications for predicting the firm’s value empirical model.

Keywords: Profitability, Audit Quality, Firm’s Value Empirical Models

Authors’ individual contribution: Conceptualization – S. and T.H.; Methodology – S. and T.H.; Formal Analysis – S.; Investigation – S. and T.H.; Writing – Original Draft – S.; Writing – Review & Editing – T.H.; Supervision – S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C12, G320, N65

Received: 15.12.2020
Accepted: 19.02.2021
Published online: 23.02.2021

How to cite this paper: Sarwani, & Husain, T. (2021). The firm’s value empirical models in automotive and components subsectors enterprises: Evidence from developing economy. Journal of Governance & Regulation, 10(1), 83-95. https://doi.org/10.22495/jgrv10i1art9