Cash Holding, R&D, and Financial Performance of Listed Companies in Indonesia
Keywords:
Cash Holding, R&D, EPS, Covid-19
Abstract
It is anticipated that this study will help businesses during the pandemic by offering guidance on tactics that will facilitate access to funding and resources for research and development. The degree of success can rise to the advantage of staff members and business owners if managers of companies can more accurately identify plans in the areas of financial resources and research and development. The three variables in this study are cash holdings, This is the dependent variable, profits per share (EPS), the mediating variable, and the independent variable is research and development. The research sample consists of businesses that are listed on the Indonesia Stock Exchange and are involved in R&D between 2020 and 2022. The data analysis procedure employed Stata software to ascertain the role that R&D activities had as a mediating variable in the relationship between cash holdings and EPS. The results of the study show that cash holdings significantly affect R&D activity but have no discernible effect on EPS. Research and development endeavors have proven to have a significant mediating effect, with a probability of less than 0.05. Consequently, during the Covid pandemic, R&D efforts in businesses contributed to better cash holding performance on EPS.
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References
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Ogbeide, S. (2017). A Study on the Relationship between Cash-flow and Financial Performance of Insurance Companies: Evidence from a Developing Economy. Revista de Management Comparat Internațional, 18(2), 148–157.
Panyagometh, K. (2020). The Effects of Pandemic Event on the Stock Exchange of Thailand. Economies, 8(4). https://doi.org/10.3390/ECONOMIES8040090
Razaq, A., & Freihat, F. (2019). Impact of R & D Expenditure on Financial Performance : Jordanian Evidence Impact of R & D Expenditure on Financial Performance : Jordanian Evidence. November 2017, 73–83.
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Ross, S. A. (1977). Informational Asymmetries, Financial Structure, and Financial Intermediation: Discussion. The Journal of Finance, 32(2), 412. https://doi.org/10.2307/2326773
Sari, C. T., Estuti, E. P., & Indriastuti, A. (2022). Does super deduction R&D financial policy in the pandemic Covid-19 give a super reaction? Journal of Business and Banking, 11(2), 201. https://doi.org/10.14414/jbb.v11i2.2711
Setiawan, R., & Harmasanto, D. H. (2019). Pengeluaran R&D Dan Kinerja Perusahaan Manufaktur Di Bursa Efek Indonesia Yang Dimoderasi Oleh Usia Perusahaan. Jurnal Riset Akuntansi Dan Bisnis Airlangga, 4(2), 644–668. https://doi.org/10.31093/jraba.v4i2.165
Shi, X., & Wu, T. (2016). Financial Constraints , Financing Channels and Corporations ’ R & D Investment. May, 248–260.
Soet, M. A., Muturi, W., & Oluoch, O. (2018). Effect of Operating Cash Flow Management on. European Journal Of Business, Economics And Accountancy, 6(5), 37–46.
Supatminingsih, S., & Setyawati, S. (2018). An Analysis Of Cash Flow Report Effect On Financial Performance (Case Study In Course And Training Institutions Putra Perwira Sukoharjo 2014-2016). International Journal of Economics, Business and Accounting Research (IJEBAR), 2(01). https://doi.org/10.29040/ijebar.v2i01.227
Thaler, R. H. (2018). Behavioral economics: Past, present, and future. Revista de Economia Institucional, 20(38), 9–43. https://doi.org/10.18601/01245996.v20n38.02
Tung, L. T., & Binh, Q. M. Q. (2022). The impact of R&D expenditure on firm performance in emerging markets: evidence from the Vietnamese listed companies. Asian Journal of Technology Innovation, 30(2), 447–465. https://doi.org/10.1080/19761597.2021.1897470
VanderPal, G. (2015). Impact of R&D expenses and corporate financial performance. Journal of Accounting and Finance, 15(7), 135–149. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2959290
Xu, J., & Jin, Z. (2016). Research on the Impact of R&D Investment on Firm Performance in China’s Internet of Things Industry. Journal of Advanced Management Science, 4(2), 112–116. https://doi.org/10.12720/joams.4.2.112-116
Zang, Z., Zhu, Q., & Mogorrón-Guerrero, H. (2019). How does R & D investment affect the financial performance of cultural and creative enterprises? The moderating effect of actual controller. Sustainability (Switzerland), 11(2). https://doi.org/10.3390/su11020297
Zhao, X., & Sun, B. (2016). The influence of Chinese environmental regulation on corporation innovation and competitiveness. Journal of Cleaner Production, 112, 1528–1536. https://doi.org/10.1016/j.jclepro.2015.05.029
Zhao, Y. (2017). Research on the Relationship between RaD Investment and Cash Holdings of Enterprises. 101(Icemct), 1535–1538. https://doi.org/10.2991/icemct-17.2017.327
Adriatama, I., & Rahadi, R. A. (2021). Effect of Governmental Announcement and Decisions During Covid-19 on Indonesian Sectoral Indexes. Jurnal Manajemen Dan Kewirausahaan, 23(1), 61–75. https://doi.org/10.9744/jmk.23.1.61-75
Ali, A. T., & Mukhongo, A. L. (2016). Effects of cash flow Management on Financial Performance of Small and Medium Enterprise in Mogadishu Somalia ( A case study of bakara market ). 94, 40538–40546.
Amah, K. O., Michael Chidiebere Ekwe, & Uzoma, I. J. (2016). Relationship of Cash Flow Ratios and Financial Performance. European Journal of Accounting, Auditing and Finance Research, 4(4), 89–97. http://ecommons.luc.edu/cgi/viewcontent.cgi?article=1029&context=meea
Baruník, J., & Čech, F. (2021). Measurement of common risks in tails: A panel quantile regression model for financial returns. Journal of Financial Markets, 52. https://doi.org/10.1016/j.finmar.2020.100562
Bloch, C. (2015). R & D Investment and Internal Finance R & D INVESTMENT AND INTERNAL FINANCE : THE CASH FLOW EFFECT. February 2005, 37–41.
Brown, J. R., Martinsson, G., & Petersen, B. C. (2012). Do financing constraints matter for R&D? European Economic Review, 56(8), 1512–1529. https://doi.org/10.1016/j.euroecorev.2012.07.007
Busru, S. A., & Shanmugasundaram, G. (2017). Effects of innovation investment on profitability and moderating role of corporate governance: empirical study of Indian listed firms. Indian Journal of Corporate Governance, 10(2), 97–117. https://doi.org/10.1177/0974686217730938
De Medeiros, O. R., & Matsumoto, A. S. (2006). Market reaction to stock issues in Brazil: Insider trading, volatility effects and the new issues puzzle. Investment Management and Financial Innovations, 3(1), 142–150.
Deasy, L. K., & Vivi, I. B. (2020). Perbandingan Abnormal Return Saham Sebelum dan Sesudah Perubahan Waktu Perdagangan Selama Pandemi Covid-19. Jurnal Pasar Modal Dan Bisnis, 2(2), 195–202.
Erdogan, M., & Yamaltdinova, A. (2019). A Panel Study of the Impact of R&D on Financial Performance: Evidence from an Emerging Market. Procedia Computer Science, 158, 541–545. https://doi.org/10.1016/j.procs.2019.09.087
Florentina-Simona, P. (2010). Study on the Importance of Cash Flow Analysis Based on Rates in the Financial Decision Making Process. Annals of University of Craiova - Economic Sciences Series, 2(38), 1–10. http://accioneduca.org/admin/archivos/clases/material/importance-of-cash-flow_1564082827.pdf
Grigoriou, N., Davcik, N., & Sharma, P. (2016). Exploring the Influence of Brand Innovation on Marketing Performance Using Signaling Framework and Resource-Based Theory (RBT) Approach. Developments in Marketing Science: Proceedings of the Academy of Marketing Science, 813–818. https://doi.org/10.1007/978-3-319-11815-4_238
Groeneveld, J., Müller, B., Buchmann, C. M., Dressler, G., Guo, C., Hase, N., Hoffmann, F., John, F., Klassert, C., Lauf, T., Liebelt, V., Nolzen, H., Pannicke, N., Schulze, J., Weise, H., & Schwarz, N. (2017). Theoretical foundations of human decision-making in agent-based land use models – A review. Environmental Modelling and Software, 87, 39–48. https://doi.org/10.1016/j.envsoft.2016.10.008
Indriani, E., & Sari, C. T. (2018). Behavioral finance: The analysis of investor behavior based on belief and feeling and the investor rationality towards LQ 45 stocks. Investment Management and Financial Innovations, 15(1). https://doi.org/10.21511/imfi.15(1).2018.24
Kiraci, M., & Celikay, F. (2016). The Effects of Firms’ R & D Expenditures on Profitability: An Analysis with Panel Error Correction Model for Turkey. International Journal of Business and Social Science, 7(5), 233–240. https://www.researchgate.net/profile/Ferdi-Celikay/publication/340384073_The_Effects_of_Firms%27_R_D_Expenditures_on_Profitability_An_Analysis_with_Panel_Error_Correction_Model_for_Turkey/links/5e85ddb692851c2f5274bc86/The-Effects-of-Firms-R-D-Expenditure
Liman, M., & Mohammed, A. S. (2019). Operating Cash Flow and Corporate Financial Performance of Listed Conglomerate Companies in Nigeria Prof Muhammad Liman And Aminatu Sani Mohammed. International Journal of Commerce and Management, 14(2), 48–61. https://doi.org/10.9790/0837-2302110111
Mustanda, S. and. (2018). REAKSI PASAR MODAL INDONESIA TERHADAP PERISTIWA Ni Made Ayu Windika Saraswati 1 Fakultas Ekonomi dan Bisnis Universitas Udayana , Bali , Indonesia ABSTRAK Pasar modal memiliki peran yang sangat penting bagi perekonomian suatu negara , sebab pasar modal me. Saraswati and Mustanda, 7(6), 2971–2998.
Ogbeide, S. (2017). A Study on the Relationship between Cash-flow and Financial Performance of Insurance Companies: Evidence from a Developing Economy. Revista de Management Comparat Internațional, 18(2), 148–157.
Panyagometh, K. (2020). The Effects of Pandemic Event on the Stock Exchange of Thailand. Economies, 8(4). https://doi.org/10.3390/ECONOMIES8040090
Razaq, A., & Freihat, F. (2019). Impact of R & D Expenditure on Financial Performance : Jordanian Evidence Impact of R & D Expenditure on Financial Performance : Jordanian Evidence. November 2017, 73–83.
Rosemary, I. H., Prince, A. I., Jack, A. E., Fausat, O. I., Enoch, E. N., & Samuel, U. E. (2021). Cash flow management and industrial firms performance in nigeria. Universal Journal of Accounting and Finance, 9(4), 701–711. https://doi.org/10.13189/ujaf.2021.090416
Ross, S. A. (1977). Informational Asymmetries, Financial Structure, and Financial Intermediation: Discussion. The Journal of Finance, 32(2), 412. https://doi.org/10.2307/2326773
Sari, C. T., Estuti, E. P., & Indriastuti, A. (2022). Does super deduction R&D financial policy in the pandemic Covid-19 give a super reaction? Journal of Business and Banking, 11(2), 201. https://doi.org/10.14414/jbb.v11i2.2711
Setiawan, R., & Harmasanto, D. H. (2019). Pengeluaran R&D Dan Kinerja Perusahaan Manufaktur Di Bursa Efek Indonesia Yang Dimoderasi Oleh Usia Perusahaan. Jurnal Riset Akuntansi Dan Bisnis Airlangga, 4(2), 644–668. https://doi.org/10.31093/jraba.v4i2.165
Shi, X., & Wu, T. (2016). Financial Constraints , Financing Channels and Corporations ’ R & D Investment. May, 248–260.
Soet, M. A., Muturi, W., & Oluoch, O. (2018). Effect of Operating Cash Flow Management on. European Journal Of Business, Economics And Accountancy, 6(5), 37–46.
Supatminingsih, S., & Setyawati, S. (2018). An Analysis Of Cash Flow Report Effect On Financial Performance (Case Study In Course And Training Institutions Putra Perwira Sukoharjo 2014-2016). International Journal of Economics, Business and Accounting Research (IJEBAR), 2(01). https://doi.org/10.29040/ijebar.v2i01.227
Thaler, R. H. (2018). Behavioral economics: Past, present, and future. Revista de Economia Institucional, 20(38), 9–43. https://doi.org/10.18601/01245996.v20n38.02
Tung, L. T., & Binh, Q. M. Q. (2022). The impact of R&D expenditure on firm performance in emerging markets: evidence from the Vietnamese listed companies. Asian Journal of Technology Innovation, 30(2), 447–465. https://doi.org/10.1080/19761597.2021.1897470
VanderPal, G. (2015). Impact of R&D expenses and corporate financial performance. Journal of Accounting and Finance, 15(7), 135–149. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2959290
Xu, J., & Jin, Z. (2016). Research on the Impact of R&D Investment on Firm Performance in China’s Internet of Things Industry. Journal of Advanced Management Science, 4(2), 112–116. https://doi.org/10.12720/joams.4.2.112-116
Zang, Z., Zhu, Q., & Mogorrón-Guerrero, H. (2019). How does R & D investment affect the financial performance of cultural and creative enterprises? The moderating effect of actual controller. Sustainability (Switzerland), 11(2). https://doi.org/10.3390/su11020297
Zhao, X., & Sun, B. (2016). The influence of Chinese environmental regulation on corporation innovation and competitiveness. Journal of Cleaner Production, 112, 1528–1536. https://doi.org/10.1016/j.jclepro.2015.05.029
Zhao, Y. (2017). Research on the Relationship between RaD Investment and Cash Holdings of Enterprises. 101(Icemct), 1535–1538. https://doi.org/10.2991/icemct-17.2017.327
Published
2024-04-16
How to Cite
Cahyani Tunggal Sari. (2024). Cash Holding, R&D, and Financial Performance of Listed Companies in Indonesia. Jurnal Scientia, 13(02), 1524-1534. Retrieved from http://infor.seaninstitute.org/index.php/pendidikan/article/view/2354
Section
Articles
