Profitability, Growth Opportunities, and Institutional Ownership Effects on Firm Value with Firm Size as Mediating Variable

Abstract

This research examines profitability, growth opportunities, and institutional ownership influences on firm value, with firm size serving as a mediating variable in consumer non-cyclical companies listed on the Indonesia Stock Exchange. Employing quantitative methodology with Structural Equation Modeling-Partial Least Squares analysis, data were collected from 69 companies spanning 2020-2023 through purposive sampling. Results reveal profitability, growth opportunities, and institutional ownership demonstrate positive significant impacts on firm value. Firm size significantly affects firm value while partially mediating profitability-firm value relationships. The model explains 47.1% firm value variance, confirming internal financial performance indicators, ownership structures, and organizational scale collectively constitute critical value creation determinants. Findings emphasize integrated approaches combining profitability enhancement, strategic growth initiatives, institutional investor engagement, and scale optimization as essential strategies for maximizing shareholder value within consumer goods sectors.