OIDA International Journal of Sustainable Development
Open-access peer-reviewed journal
https://doi.org/10.64211/oidaijsd190604
Dynamic Interaction of Company Size, Risk Management, and Financial Performance on Company Value: The Moderating Role of Corporate Governance in Indonesian Conventional Banks (2012-2017)
Ahmad Raja 1*, Kadarisman Hidayat 2, Saparila Worokinasih 3, Ari Darmawan 4
1, 2 ,3, 4 Administrative Sciences, Faculty of Administrative Sciences, Universitas Brawijaya, Indonesia.
*Corresponding author: ahmad.rajas2022@gmail.com
Volume 19, Issue 06, Pg. 49-66, 2026.
Abstract: This study analyzes the complicated interactions among Firm Size, Risk Management, Financial Performance, and Firm Value in conventional Indonesian banks, focusing on the moderating function of Corporate Governance. Analyzing panel data from 14 IDX (Indonesia Stock Exchange) from 2012-2017 via Structural Equation Modeling (WarpLS 8), the study reveals that while larger firm size enhances performance and value, it inversely affects Risk Management.
Conversely, Risk Management clearly has a negative effect on each Financial Performance and Firm Value. Extensively, corporate governance acts as a moderator by using dampening the tremendous link among size and performance in large banks, whilst intensifying the negative impact of risk management on performance. however, the moderating impact of Corporate Governance isn’t sizeable within the relationships among Firm Size-Risk Management, Firm Size-Firm Value, Risk Control-Firm Value, and Financial Performance- Firm Value. The results of this research show empirical support for the Resource-Based View, Signaling, Agency, and Value Relevance theories within an emerging market context. In practice, these findings offer strategic implications for financial institution management and regulators to optimize growth, risk management, and governance for long-term firm stability and value.
Keywords: Firm Size, Risk Management, Financial Performance, Firm Value, Good Corporate Governance, Conventional Commercial Banks, Indonesia.
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