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 and partial least squares analysis, data was collected from 69 companies spanning 2020–2023 through purposive sampling. Results reveal profitability, growth opportunities, and institutional ownership have significant positive impacts on firm value. Firm size significantly affects firm value while partially mediating profitability-firm value relationships. The model explains 47.1% of firm value variance, confirming internal financial performance indicators, ownership structures, and organizational scale collectively constitute critical value creation determinants. The findings highlight that using combined methods to improve profits, pursue strategic growth, engage with institutional investors, and optimize size are key strategies for increasing shareholder value in the consumer goods industry.