THE EFFECT OF RESEARCH AND DEVELOPMENT (R&D) COSTS AND GOOD CORPORATE GOVERNANCE (GCG) ON COMPANY VALUE

Abstract

This study aims to analyze the effect of research and development (R&D) costs and governance on firm value. This topic is still being debated because research and innovation in Indonesia lags far behind other countries. Quality research and superior innovation are key factors in driving economic growth. In addition to the R&D factor, effective corporate management through a good governance system is also an important element in increasing firm value. In this study, the governance aspects studied include the structure of the board of directors, the existence of an independent board of commissioners, management share ownership, and institutional share ownership. The data analysis process was carried out using SPSS software version 24, with data from companies in the consumer cyclicals and technology sectors listed on the Indonesia Stock Exchange (IDX) during the period 2018 to 2023. The research sample consisted of 452 companies selected using the purposive sampling method with the criteria of companies that published annual reports and included information on R&D activities during that period. The results of the study indicate that R&D costs, management share ownership, and institutional share ownership have a positive effect on firm value. On the other hand, the structure of the board of directors and the presence of independent commissioners have a negative impact on company value.

Keywords:  Research And Development; Board Of Director; Share Ownership; Company Value