FIRM VALUE: TOBIN'S Q

Abstract

ABSTRACT

Purpose — Firm value is an important topic to examine because firm value is represent of company performance for the company and external stakeholders such as investors that reflect the company's future prospects. The purpose of this literature review is to examine the research phenomenon that occurs in firm value with the proxy of tobin's q and to find out the factors that influence company value with the proxy of tobin's q.

Design/methodology/approach — The method used is a systematic literature review. Article searches were conducted online using the keyword "tobin's q firm value" via Google Scholar. Total of 15 articles in a 5-year period, from 2020 to 2024, included in the Sinta 1-5 index were used to conduct this literature review.

Findings — The results of this literature review show a phenomenon that occurs in the value of the company with the proxy tobin's q, there is an anomalous phenomenon, namely the inconsistency between actual conditions and theories related to independent variables with the value of the food and beverage sector company, then there is a decrease in the value of the company in the LQ45 index company, property sector, manufacturing sector, food and beverage sector, and 7 coal sector companies have a company value of less than 1. The coal sector declined due to environmental issues, namely an increase in chemical content. The factors that influence tobin's q consist of dividen payout, return on asset, size, asset growth, return on equity, sales growth, debt to equity ratio, market to book value of equity, earning per share, corporate social responsibility, and green accounting.

Practical implications — Tobin's q can be used as an indicator in measuring the value of companies in various sectors because Tobin's q is considered to provide the most accurate information, taking into account all aspects of debt, equity, and market value.

Originality/value — The novelty element of this literature study discusses the phenomenon of green accounting as a factor that influences firm value with the proxy of tobin's q.

Keywords — Literature review, factor that influence tobin’s q, and tobin’s q.

Paper type — Literature study.