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September 10, 2025Edelweiss Applied Science and TechnologyOpen Access

Agency, signals, and the paradox of efficiency: Mediating role of investment efficiency in determining firm value in Indonesia

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Authors

KWKetut Arya Bayu WicaksanaUdayana University IPIda Bagus Anom PurbawangsaUdayana University LALuh Gede Sri ArtiniUdayana University

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Implication

Observational analysis shows investment efficiency mediates financial performance and firm value in Indonesia, suggesting governance dynamics are crucial.

Key Points

Investment efficiency negatively impacts firm value, indicating conservative financial behavior may suggest limited growth.
Financial performance and business risk both adversely affect firm value, with business risk partially mediated by investment efficiency.
Data from 711 firm-year observations reveals a disconnect between internal governance mechanisms and market perceptions.
Corporate governance factors like institutional ownership and board diversity show complex relationships with firm value and investment efficiency.

Cite This Study

Wicaksana et al. (2025) studied this question.

synapsesocial.com/papers/68c1c31254b1d3bfb60f04c7 https://doi.org/10.55214/2576-8484.v9i8.9256

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Implication

Observational analysis shows investment efficiency mediates financial performance and firm value in Indonesia, suggesting governance dynamics are crucial.