Enterprise risk management, intellectual capital, and investment opportunity set on firm value through financial performance as an intervening variable

Purpose This study aims to investigate the impact of enterprise risk management (ERM), Intellectual Capital (IC) and investment opportunities set (IOS) on Firm Value, with financial performance serving as a mediating variable. The focus is on halal-labeled industry companies in Indonesia and Malaysia, given the intense and rapidly evolving business competition that influence corporate development, which can assessed through firm value and financial performance. Design/methodology/approach A quantitative approach was used, using secondary data from financial statements and annual reports of halal-labeled companies listed on the Indonesia Stock Exchange and Bursa Malaysia from 2017–2023. The study’s sample comprised companies within the halal-labeled industrial sector, specifically in food and beverage, cosmetics, household appliances, pharmaceuticals, and others sub-sectors during this period. A purposive sampling method was used based on predetermined criteria, and the collected data were analyzed using Smart PLS software. Findings The study’s results confirm ten hypotheses indicating that ERM, IC and IOS significantly influence firm value. Additionally, ERM, IC and IOS positively affect financial performance, which in turn impacts firm value. Moreover, the mediation analysis reveals that financial performance serves as an intermediary, enhancing the relationship between ERM, IC, IOS and firm value. Research limitations/implications This study has several limitations that may affect the results, including the analysis of data over only seven years and a focus on halal-labeled manufacturing companies in Indonesia and Malaysia. Future research may yield different results if conducted across various industries and regions. Additionally, future studies should consider incorporating other variables to identify which factors most significantly influence the dependent variable. Expanding the range of companies studied will enhance the interpretation of results. Practical implications Company managers in the halal industry sector in Indonesia and Malaysia must consider ERM, IC, Investment IOS and also financial performance to be able to increase firm value. If firm value increases, it will attract investors who are useful for halal industry companies. Social implications If the firm value of halal industry increases, this will bring a good social impact, namely increasing public trust in halal industry products in Indonesia and Malaysia. Furthermore, it is hoped that these halal products will be able to compete and eliminate non-halal products in Muslim countries. Originality/value This research is original in its analytical approach, using Smart PLS software to validate the outer and inner models, ensuring their reliability and validity. The data combine insights from both Indonesia and Malaysia, a relatively under-research area to date. In Indonesia, halal labeling has recently become mandatory as required by the Indonesian Ulema Council. This study bridges the gap in understanding the interplay between ERM, IC and IOS concerning financial performance and firm value. By emphasizing the mediating role of financial performance, it not only clarifies the direct relationships among these variables but also examines how Financial Performance can either enhance or diminish the effects of ERM, IC and IOS on firm value.