THE EFFECT OF PROFITABILITY, ESG, AND LIQUIDITY ON THE MARKET VALUE OF CONVENTIONAL BANKING FIRMS LISTED IN THE KOMPAS100 INDEX (2020-2024)
Keywords:
Market Value, Profitability, ESG, Liquidity, Firm Size, Firm AgeAbstract
This study aims to analyze the effects of profitability, ESG, and liquidity on the market value of conventional banking firms listed in the KOMPAS100 Index on the Indonesia Stock Exchange during the 2020–2024 period. Using a quantitative approach, secondary data were obtained from the financial statements, annual reports, and sustainability reports of the sampled firms. The sample was selected through purposive sampling, resulting in 20 firms and 91 observations, with the dataset consisting of unbalanced panel data. Data were analyzed using panel data regression with the Fixed Effects Model (FEM), which was subsequently corrected using cluster-robust standard errors. The results show that profitability, as proxied by both Return on Assets (ROA) and Return on Equity (ROE), has a positive and significant effect on market value. ESG also has a positive and significant effect on market value in both models. Liquidity, proxied by the Loan to Deposit Ratio (LDR), has a positive and significant effect in the ROE model, but no significant effect in the ROA model. These findings indicate that the market value of banking firms is influenced not only by financial performance but also by the firms’ commitment to sustainability.
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