Macro and Micro Fundamentals, Investment Opportunities, and Capital Structure on Company Value with Business Risk and Financial Performance as Mediation

Document Type : Research Paper

Authors

1 University of 17 August 1945 Surabaya, Jawa Timur 60118, Indonesia.

2 University of 17 August 1945 Surabaya, Jawa Timur 60118, Indonesia

Abstract

The purpose of this study is to analyze and understand the influence of macro fundamentals, micro fundamentals, investment opportunity set, and capital structure on company value, with business risk and financial performance as mediating variables, and financial flexibility as moderating variables, in construction companies listed on the Indonesia Stock Exchange. The population used in this study includes all construction companies in Indonesia, particularly those listed on the Indonesia Stock Exchange. In this study, the sampling technique used was non-probability with a comprehensive sampling approach (census). The sample for this study consists of 30 construction companies listed on the Indonesia Stock Exchange from 2018 to 2022. This research uses secondary data or information processed with statistical methods and PLS software. The data analysis method used is Partial Least Square (PLS). The results showed that macro and micro fundamental factors did not have a significant and opposite influence on the business risk of construction companies listed on the Indonesia Stock Exchange. Meanwhile, the Investment Opportunity Set tended to have an insignificant negative impact on business risk, while the capital structure had a significant positive impact. Regarding financial performance, micro fundamental factors had a significant positive influence, while macro fundamentals were not significant. The Investment Opportunity Set and capital structure did not have a significant effect on the financial performance of construction companies. In addition, these factors did not have a significant effect on the value of the company.

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References

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Iranian Economic Review
Volume 30, Issue 1
March 2026
Pages 399-424

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