Determinants of Firm Value in Consumer Non-Cyclicals: The Quasi-Moderating Role of Firm Size

This study examines the structural effect of Profitability (ROA) on Firm Value (Tobin’s Q) and evaluates the moderating role of Firm Size (SIZE) within the Consumer Non-Cyclical sector listed on the Indonesia Stock Exchange (IDX) for the period 2019–2025. Grounded in a hierarchical theoretical framework integrating Signaling Theory, Stakeholder Theory, Agency Theory, and the Deep Pocket Hypothesis, this research resolves empirical debates regarding valuation anomalies in emerging capital markets. Utilizing an explanatory panel data regression under the Swamy-Arora Random Effects Model (REM) with Moderated Regression Analysis (MRA) and procedures via EViews 14, the empirical results reveal three major insights. First, Profitability (ROA) exerts a statistically significant negative effect on Firm Value, uncovering a Decoupling Valuation / Market Anomaly where capital markets temporarily penalize short-term earnings due to perceived ESG compliance and transition costs. Second, standalone Firm Size exerts a statistically significant negative direct main effect on Firm Value, indicating a valuation discount driven by agency costs, organizational complexity, and market maturity saturation. Crucially, third, the interaction model confirms that Firm Size functions as a Quasi-Moderator / Strategic Buffer, successfully reversing and overpowering the primary negative valuation penalties of both ROA and standalone asset scale. Grounded in the Deep Pocket Hypothesis, investors award valuation premiums to corporate earnings if and only if those profits are backed by a massive asset base capable of buffering operational and regulatory risks.