Moderating Effects of Gender Diversity and Company Size on the Financial Determinants of Firm Value

Abstract

Aims: Moderating effects is critical to corporate finance and governance. This study explores how gender diversity and firm size alter the influence between the key financial drivers of profitability, capital structure, and current ratio on firm value. Study Design: This Study is a quantitative analysis that employs a purposive sampling method, we used 92 companies as the population with 79 data were used as the sample in the basic materials sector listed on the Indonesia Stock Exchange from 2021 to 2023. Test carried out using MRA analysis and classical assumption test. Methodology: This study examines how capital structure, current ratio, and profitability on firm value are moderated by gender diversity and firm size. The analysis was conducted using SPSS 26. Results: The results of the study indicate that capital structure and profitability do not affect firm value, while the current ratio has a positive effect. Gender diversity as a moderator is able to strengthen the influence of capital structure and current ratio. However, gender diversity is able to weaken the effect of profitability. Furthermore, company size as a moderator is not able to moderate the effect of capital structure on firm value, but company size is able to strengthen the effect of profitability, and finally, company size is able to weaken the effect of current ratio on firm value. Conclusion: Practically, our findings can help shape policies that support financial stability, assist investors in their decision-making in the basic materials sector, and encourage management in devising impairment mitigation strategies, including improving gender equality in leadership. Theoretically, this shows the importance of moderating variables emphasizing that gender diversity is not an automatic guarantee of value, but rather a strategic investment that requires careful management to optimize its positive impact on firm performance and value.