FIRM VALUE DETERMINATION WITH INFLATION AND EXCHANGE RATE AS A MODERATING VARIABLE (Study on the Manufacturing Industry Recorded in Indonesian Sharia Stock Index)


  • Soeharjoto Soekapdjo Trisakti University
  • Miyasto * Diponegoro University
  • Tatik Mariyanti Trisakti University



Purpose - Aims of this research are to determine the factors that influence the firm value of the manufacturing industry listed on the Indonesia Sharia Stock Index.


Design/methodology/approach - Used panel data regression method from 2013-2018, then obtained 30 manufacturing industry companies after purposive sampling. Syariah stock investors who rationally and religiously behave are accommodated in the variables used. The dependent variable is firm value and the independent variable are return on equity, current ratio, debt to equity ratio, total assets turn over, Islamic social reporting, with the exchange rate and inflation as the moderating variable.


Finding - Results show that return on equity with inflation as a moderating variable has a positive effect on firm value. Islamic social reporting has a positive effect on firm value. Debt to equity ratio with the exchange rate as a moderating variable has a negative effect on firm value. The current ratio and total assets turnover are not significant to firm value.


Practical Implication - To increase the firm value, it is necessary to improve human resources and the application of environmentally friendly technology, planning in production and expansion, transparency and application of sharia principles, professional and fair managers.


Originality/value - This study combines the company’s financial ratios, Islamic social reporting, and macroeconomic conditions that are beyond management control. Tobins’ Q is used to the corporate values approach. All of these, reflect that firm value is influenced by company performance, society, and government.



Keywords - Firm Value, Financial Ratio, Islamic Social Reporting, Sharia Enterprise Theory, Macroeconomics, Indonesia Sharia Stock Index


Akerlof, G. A. 1970. The Market for "Lemons": Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488-500.

Angelidis, J. & Ibrahim, N. 2004. An Exploratory Study of the Impact of Degree of Religiousness upon an Individuals Corporate Social Responsive Orientation. Journal of Business Ethics, 51, 119–128.

Belkaoui & Riahi, A. 2003. Intellectual Capital And Firm Performance Of US Multinational Firms: A Study Of The Resource-Based And Stakeholder Views. Journal Of Intellectual Capital, 4(2), 215-226.

Brigham, E. F. & Davis, P. R. 2007. Intermediate Financial Management. Thomson, New York.

Bidhari, S. C., Salim, U., & Aisjah, S. 2013. Effect of Corporate Social Responsibility Information Disclosure on Financial Performance and Firm Value in Banking Industry Listed at Indonesia Stock Exchange. European Journal of Business and Management, 5(18), 39-47.

Berman, K., Knight, J., & Case, J. 2013. Financial Intelligence. A Manager’s Guide to Knowing What the Number Really Mean. Harvard Business School Press, USA.

Chapra, M. U. 2001. What is Islamic Economics. IRTI-IDB, Jeddah.

Choudhury, M. A. 2019. The Tawhidi methodological worldview: a transdisciplinary study of Islamic economics, Springer Nature, Singapore.

Gharaibeh, A. M. O. & Qader, A. A. A. A. 2017. Factors Influencing Firm Value as Measured by the Tobin’s Q: Empirical Evidence from the Saudi Stock Exchange (TADAWUL). International Journal of Applied Business and Economic Research, 15(6), 333-347.

Horne, J.C.V. & Wachowicz, J.M. 2008. Fundamentals of Financial Management, Prentice-Hal, USA.

Haniffa, R. 2002, Social Reporting Disclosure-An Islamic Perspective. Indonesian Management & Accounting Research, 1(2), 128-146.

Herath, S. K. & Albarqi, N. 2017. Financial Reporting Quality: A Literature Review. International Journal of Business Management and Commerce, 2(2), 1-14.

Harahap, S. S. 2018. Analisis Kritis Atas Laporan Keuangan. PT. Raja Grafindo Persada, Jakarta.

Jensen, M. C. & Meckling, W. H. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.

Kahf, M. 1978. The Islamic Economy: Analytical Study of the Functioning of the Islamic Economic System. American Trust Publication, Indiana.

Kitzmueller, M. and Shimshack, J. 2012. Economic Perspectives on Corporate Social Responsibility. Journal of Economic Literature, 50(1), 51-84.

Keown, A. J., Martin, J. D. & William, P. J. 2017. Foundations of Finance, Pearson.

KarakuÅŸ, R. & Ibrahim, B. 2017. The Effect of Financial and Macroeconomic Factors on Firm Value: An Empirical Analysis in Borsa Istambul. 4th RSEP Multidisciplinary Conference, Prageu, Czechia, 29-30 June. 27-34.

Longenecker, J. G., McKinney, J. A. & Moore, C. W. 2004. Religious intensity, evangelical Christianity, and business ethics: An empirical study. Journal of Business Ethics, 55, 373– 386.

Lidyah, R., Amir, A., Yacob, S. & Rahayu, S. 2019. The Effect of Board of Director, Board of Commissioner and Audit Committee on Value of Firm to Islamic Social Reporting as A Mediating Variable. Journal of Business Studies and Management Review, 2(2), 82-87.

Modigliani, F. and Miller, M. H. 1958. The cost of capital, corporate finance and theory of investment. American Economic Review, 48(3), 261-297.

Mathew, M. R. 1993. Socially Responsible Accounting, Chapman & Hall. UK.

Marsha, N. & Murtaqi. I. 2017. The Effect of Financial Ratios on Firm Value in The Food and Beverage Sector of The IDX. Journal of Business and Management, 6(2), 214-226.

Nugroho, L., Utami, W., Doktorlina, C. M., Soekapdjo, S. & Husnadi, T. C. 2017. Islamic Banking Capital Chalanges to Increase Business Expansion (Indonesia Cases). International Journal of Commerce and Finance, 3(2). 10-26.

Othman, R., Thani, A. M. & Ghani, E. K. 2009. Determinants of Islamic Social Reporting Among Top Shariah-Approved Companies in Bursa Malaysia. Research Journal of International Studies, 12(10), 4-20.

Sarea, A. M. & Hanefah, M. M. 2013. The need of accounting standards for Islamic financial institutions. International Management Review, 9(2), 50-59.

Said, H. B. 2013. Impact of Ownership Structure on Debt Equity Ratio: A Static and a Dinamic Analytical Framework. International Business Reseach, 6(6), 162-180.

Soeharjoto. 2016. Pengaruh Penanaman Modal Asing dan tingkat Daya Saing Terhadap Ekspor Industri Manufaktur Indonesia. Media Ekonomi, 24(2), 161-174.

Soekapdjo, S., Nugroho, L., Badawi, A. & Utami, W. 2018. Bad Debt Issues in Islamic Bank: Macro and Micro Influencing (Indonesia Cases). International Journal of Commerce and Finance, 4(1). 10-26.

Sukmawardini, D. & Ardiansari, A. 2018. The Influence of Institutional Ownership, Profitability, Liquidity, Dividend Policy, Debt Policy on Firm Value. Management Analysis Journal, 7(2), 211-222.

Tobin, J. 1969. A General Equilibrium Approach to Monetary Theory. Journal of Money Credit and Banking, 1(1). 15-29.

Triwiyono, I. 2007. Mengangkat “Sing Liyan†Untuk Formulasi Nilai Tambah Syari’ah. Jurnal Akuntansi Multiparadigma, 2(2). 186-368.

Wertheim, P. & Robinson, M.A. 1993. Earning Versus Cash Flow: The Information Provided About Change in Company Liquidity. Journal of Applied Business Research, 9(4), 65-75.




How to Cite

Soekapdjo, S., *, M., & Mariyanti, T. . (2021). FIRM VALUE DETERMINATION WITH INFLATION AND EXCHANGE RATE AS A MODERATING VARIABLE (Study on the Manufacturing Industry Recorded in Indonesian Sharia Stock Index). The International Journal of Accounting and Business Society, 29(2), 69–84.