EFFECT OF OWNERSHIP STRUCTURES ON FIRM VALUE WITH ERM AS MODERATOR IN INDONESIAN BANKING SECTOR

Abstract

This study investigates the impact of institutional and managerial ownership on firm value, with Enterprise Risk Management (ERM) acting as a moderating variable in the Indonesian banking sector. Ownership structure is a critical component of corporate governance that influences decision-making and investor confidence. Meanwhile, ERM represents a strategic approach to managing risk, expected to reinforce governance effectiveness. Using panel data from 63 banking firms listed on the Indonesia Stock Exchange (IDX) during 2021– 2023, this research applies multiple linear regression and moderated regression analysis (MRA). The results confirm that both institutional and managerial ownership positively and significantly affect firm value. Furthermore, ERM significantly moderates these relationships, strengthening the positive impact of ownership structures on firm performance. The novelty of this study lies in its integration of ERM as a moderating variable in the ownership–value relationship within an emerging market context, addressing inconsistencies in prior findings. By focusing on the banking sector, which faces complex regulatory and risk environments, the study provides practical insights into how risk management frameworks interact with ownership governance. These findings offer implications for policymakers, investors, and bank management in improving corporate value through synergistic governance and risk strategies.