EVIEWS ANALYSIS: MODEL OF INVESTMENT OPPORTUNITY SET (IOS) AND ITS IMPLICATION TO CORPORATE VALUE ON MANUFACTURING COMPANIES LISTED IN INDONESIA STOCK EXCHANGE (IDX)

Abstract

The study aims to empirically prove Determinants of Investment Opportunity Set (IOS)) and
its implication to Corporate Value (Tobin’s Q): An Empirical study to Manufacturing
Companies Listed in Indonesia Stock Exchange” in 2010-2017, using panel data regression
models. Based on the empirical results, three variables significantly affect Investment
Opportunity Set (IOS) namely Leverage, CR and ROA, the most dominant influence is ROA
with the positive direction. The result of testing simultaneously shows four variables influence
Investment Opportunity Set (IOS) to the manufacturing companies listed on Indonesia Stock
Exchange. Of the 50 companies as research samples, a company with the most sensitive
average of change of IOS is PT Lionmesh Prima Tbk (LMSH) and the least sensitive is PT
Astra International, Tbk (ASII). Its implication for Tobin’s Q indicates that ROA, CSR, IOS
ratio have a positive influence, while LV and CR, negative influences but not significant. The
result of simultaneous testing shows LV, CR, ROA, CSR, IOS affect Tobin’s Q. The ratio of
ROA is the most dominant to affect Tobin’s Q with a positive direction. Of the 50 companies
as research samples, a company with the most sensitive average of change of Tobin’s Q is PT
Lionmesh Prima (LMSH) and the least sensitive is PT Kedaung Indah, Tbk (KICI).