The effects of capital structure, corporate governance, and intangible assets on the performance of selected Indonesian chemical companies: The role of firm size

Type of the article: Research Article AbstractThis study investigates the effects of capital structure, corporate governance, and intangible assets on financial performance and firm value in Indonesia’s chemical industry, while examining the moderating role of firm size. Focusing on the context of an emerging economy, the research explores how internal corporate factors influence firm outcomes. The study uses a quantitative approach based on secondary data collected from the financial statements of nine chemical companies listed on the Indonesia Stock Exchange, covering 108 firm-year observations from 2012 to 2023. Capital structure, corporate governance, intangible assets, and firm size are treated as independent variables, with financial performance and firm value as dependent variables. The relationships between variables are examined using Structural Equation Modeling to capture both direct and moderating effects. The findings show that capital structure and corporate governance significantly and positively influence both financial performance and firm value, aligning with trade-off and agency theories. Intangible assets significantly affect financial performance but do not directly impact firm value. Firm size has a positive effect on financial performance and moderates the relationships between intangible assets and firm value, as well as between financial performance and firm value. However, firm size does not significantly moderate the effects of capital structure or corporate governance on firm value. These results highlight the importance of internal financial strategies and governance practices in enhancing corporate outcomes in Indonesia. The study provides practical implications for managers and policymakers to strengthen firm value through effective resource allocation, governance, and strategic planning.