PROFITABILITY, CAPITAL STRUCTURE, AND FIRM SIZE ON FIRM VALUE: THE MODERATING ROLE OF SUSTAINABILITY REPORTING IN INDONESIA'S ENERGY SECTOR

Abstract

This study investigates the influence of profitability, capital structure, and firm size on firm value, while also examining sustainability reporting as a moderating variable in energy sector companies listed on the Indonesia Stock Exchange during 2021–2024. The research employs a quantitative method using secondary panel data obtained from 39 companies with 156 observations. The Random Effect Model (REM) was selected as the most appropriate estimation model based on the Chow, Hausman, and Lagrange Multiplier tests. In this study, firm value is measured using Price to Book Value (PBV), profitability by Return on Equity (ROE), capital structure by Debt to Equity Ratio (DER), firm size by the natural logarithm of total assets, and sustainability reporting through the Sustainability Report Disclosure Index (SRDI) based on Global Reporting Initiative (GRI) standards. The findings reveal that profitability, capital structure, firm size, and sustainability reporting positively and significantly affect firm value. However, the moderation results indicate that sustainability reporting weakens the effect of profitability and firm size on firm value, while it does not significantly moderate the relationship between capital structure and firm value. These results imply that the impact of sustainability reporting on firm value depends on how investors perceive and evaluate each company within the energy sector.