The Effect of Non-Performing Loan and Good Corporate Governance on Firm Value (Study on Banking Companies Listed on the IDX and KRX 2018-2022)

Abstract

This study aims to determine how firm value is influenced by non-performing loans and good corporate governance. The population of this study are banking companies listed on the Indonesia Stock Exchange (IDX) and banking companies listed on the Korea Exchange (KRX) in the 2018-2022 period. Based on the sample criteria obtained, 24 companies were obtained through purposive sampling method. This study uses data analysis methods with multiple linear regression analysis, which is carried out using the IBM SPSS Statistics 26 application. The results showed that non-performing loans have an effect on firm value and good corporate governance has no effect on firm value. This study shows that the level of quality of non-performing loans of banking companies as indicated by the amount of NPL can increase the value of the company where investors do not risk bad credit but pay more attention to the return on investment and external factors that affect the condition of the company. Meanwhile, the existence of good corporate governance implemented by banking companies with higher self-assessment ratings causes the implementation of good corporate governance to not be maximised, thus reducing investor interest in investing which has an impact on decreasing the value of the Company.