THE INFLUENCE OF GOOD CORPORATE GOVERNANCE, RISK CREDIT, AND CAPITAL STRUCTURE TOWARD VALUE OF THE FIRM

Abstract

This study aims to analyze and obtain empirical evidence of the effect of Good Corporate Governance, credit risk, capital structure and company size as control variables on company value. The theory tested in this study is signal theory. This study uses quantitative methods and the data taken from annual report of banking companies listed on the Indonesia Stock Exchange for the period 2020-2022. By using a purposive sampling technique produces 114 data. The data analysis model uses a random effect model. Data is processed using eviews 12. The results show that GCG, credit risk, capital structure have a positive effect on company value and the results do not change if tested with or without the control variable company size. This research has the implication that companies can optimize GCG practices and disclosures because in this research GCG is proven to be able to increase company value, which is in line with signal theory and companies need to maximize careful consideration in funding decisions to be able to utilize debt optimally, because in this research it is proven that capital structure can increase company value. Other implementations so that companies can increase credit distribution, but the existence of credit risk requires banking company management to further optimize credit risk management because in this research it is proven that credit risk can increase company value, if banks can manage it optimally and ensure the level of credit risk is below 5% according to with applicable provisions.