Proceedings of the 1st Widyatama International Conference on Management, Social Science and Humanities (ICMSSH 2024)

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ESG, Dividend Policy, Leverage, and Profitability: Evidence from Indonesia’s Capital Market

Authors
Ferdian Budi1, *, Gusni1
1Widyatama University, Bandung, Indonesia
*Corresponding author. Email: ferdian.budi@widyatama.ac.id
Corresponding Author
Ferdian Budi
Available Online 27 December 2024.
DOI
10.2991/978-94-6463-608-6_12How to use a DOI?
Keywords
ESG; dividend policy; leverage; profitability
Abstract

Profitability is one of the key indicators that determines a company’s ability to survive and grow in the long term. This study aims to identify the factors that affect profitability in companies listed on the Main Board Index of the Indonesia Stock Exchange during the 2018-2023 period. This is an applied research study using a quantitative approach, with panel data analysis applied to 104 companies selected through purposive sampling. The results of the study show that ESG has a positive impact on a company’s profitability, while leverage has a negative impact. However, the dividend policy did not significantly affect profitability. The findings suggest that strong ESG implementation can contribute to long-term profitability by improving a company’s reputation, attracting investors, and ensuring sustainable business operations. A high level of leverage can weigh on profitability due to increased debt costs, while a higher dividend policy does not necessarily lead to better profitability for the company. The study highlights the critical role of ESG and prudent leverage management in improving financial performance. It also provides valuable insights for investors and company managers on the importance of aligning business strategies with sustainability goals and ensuring an optimal capital structure to increase profitability in Indonesia’s capital market.

Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 1st Widyatama International Conference on Management, Social Science and Humanities (ICMSSH 2024)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
27 December 2024
ISBN
978-94-6463-608-6
ISSN
2352-5398
DOI
10.2991/978-94-6463-608-6_12How to use a DOI?
Copyright
© 2024 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Ferdian Budi
AU  - Gusni
PY  - 2024
DA  - 2024/12/27
TI  - ESG, Dividend Policy, Leverage, and Profitability: Evidence from Indonesia’s Capital Market
BT  - Proceedings of the 1st Widyatama International Conference on Management, Social Science and Humanities (ICMSSH 2024)
PB  - Atlantis Press
SP  - 98
EP  - 103
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-94-6463-608-6_12
DO  - 10.2991/978-94-6463-608-6_12
ID  - Budi2024
ER  -