The effect of R&D expenditures on firm value with firm size moderation in an Indonesia palm oil company

Abstract

AbstractThis study aims to ascertain the direct impact of Research and Development (R&D) spending on the value of a company, specifically in the palm oil industry. Additionally, the study examines how the company’s size influences its value concerning R&D expenditures. The inquiry examines the impact of control elements on important characteristics such as current ratio (CR), debt to assets ratio (DAR), return on assets (ROA), and total assets turnover (TAT) in connection to the company’s value. This study utilizes secondary data from financial statements and applies panel data analysis over three years with quarterly intervals. The purposive selection technique chose the sample from a population of agricultural companies listed on the IDX. The literature on palm oil companies still needs to adequately investigate the influence of R&D on firm value. This study investigates the impact of R&D on augmenting the value of palm oil enterprises. It specifically focuses on the function of company size as a moderate factor and the effective management of key financial issues. The data analysis and hypothesis testing were conducted using Moderated Regression Analysis (MRA) with process method (Andrew Hayes) on 179 quarterly data samples from palm oil firms listed on IDX 2019–2022. The findings of this study indicate that allocating resources toward R&D has a positive and significant effect on enhancing the overall worth of a corporation. In addition to that, the dimension of the business has an impact on the connection between the two. The elements that affect company value achievement include CR, DAR, and ROA, except for TAT. In addition to complementing previous empirical studies, this research offers two noteworthy contributions.

Keywords

• Technology innovation
• research and development
• firm value
• firm size
• palm oil
• financial ratios