Determinants of Firm Value with Financial Distress and Risk Management as Moderating Factors in Construction Companies in East Kalimantan

Abstract

This study aims to analyze the determinants of firm value in the construction sector, considering the role of financial distress and risk management as moderating variables. Firm value is an important indicator in assessing company performance and sustainability, especially in the construction industry, which is vulnerable to economic uncertainty and project fluctuations. This study uses a quantitative approach using secondary data from construction companies listed on the Indonesia Stock Exchange. The analysis was conducted using the Structural Equation Modeling (SEM) method to examine the relationship between variables. The results show that financial distress has a significant influence on the decline in firm value. However, the implementation of effective risk management can mitigate the negative impact of financial distress on firm value. These findings confirm that risk management plays a strategic role in maintaining the stability of firm value amidst financial pressure. This research provides theoretical contributions to the literature on firm value and financial distress, as well as practical implications for construction company management in designing risk mitigation strategies to improve company performance and sustainability