Revisiting the Nexus of Capital- vs. Labor-Intensive Ratio, Investment, Managerial Ownership, and Operating Leverage: A Test of Dividend and Financial Leverage as Mediating Variables

Abstract :

The purpose of this study was to analyze the influences of capital- vs. labor-intensive ratio, investment, managerial ownership, operating leverage, dividend, and financial leverage on the firm value of Indonesia's non-financial sector companies. It also examines the mediating effects of dividend and financial leverage. The research data was collected using a purposive sampling method to the data of non-financial sector companies listed on the Indonesian Stock Exchange during the period 2003-2012. Based on the criteria of the study, this study used 310 sample data and applied panel data regression and path analysis. The results show that capital- vs. labor-intensive ratio, investment, managerial ownership, operating leverage, dividend, and financial leverage have significant influences on the firm value of Indonesia's non-financial sector companies. The capital- vs. labor-intensive ratio, investment, managerial ownership, operating leverage variable do not have significant influences on the dividend. The capital- vs. labor-intensive ratio, investment, managerial ownership, operating leverage variable have significant influences on financial leverage. The path analysis result shows the capital- vs. labor-intensive ratio, investment, managerial ownership, operating leverage variable do not have a significant influence on the firm value of Indonesia non-financial sector companies with dividend and financial leverage as intervening variables.