Financial Strategy, Sustainability Issues, and Firm Value: Empirical Evidence from the Consumer Non-Cyclical Sector

Abstract

Purpose – This study aims to obtain empirical evidence on the Influence  of Environmental Disclosure, Hedging Policy and Capital Structure on Firm Value with Profitability as a Moderation Variable.

Design/methodology/approach – This study uses a type of quantitative research. The sample in this study is companies in the Non-Primary Consumer Goods sector listed on the Indonesia Stock Exchange in 2022-2024 as many as 42 companies selected using the purposive sampling method. The analysis technique used to test the hypothesis was panel data regression analysis using the Eviews 9 software. Based on the results of the Chow test, Hausman test, and Lagrange Multiplier test, the most appropriate model to use is the Random Effect Model.

Findings – The results of the study show that Environmental Disclosure and Hedging Policy do not have a significant effect on Firm Value, while Capital Structure has a negative and significant effect on Firm Value. Profitability has a positive and significant effect on Firm Value. Profitability does not reinforce the influence of Environtmental Disclosure on Firm Value. Then, Profitability strengthens the influence  of Hedging Policy and Capital Structure on Firm Value.

Research limitations/implications – The results of this study provide important implications for company management and regulators in evaluating the effectiveness of sustainability disclosure policies in the Indonesian capital market. The first limitation of this research is the type of data used in this study, namely secondary data obtained from the annual report published by the company. However, the data obtained is incomplete because many of the companies do not upload regularly every year. Furthermore, the content of the formula is incomplete or confusing, some numbers are not stated in the financial statements. Furthermore, this study has limitations in the sample from 166 to 42 samples, as for the rest due to incomplete financial statement data and many have suffered losses. And finally, the study was conducted over a specific period of time, namely 2022-2024, so it is not possible for a long-term analysis.

JEL : G32, M14, Q56, L66