The Effect of Cash Holding, Free Cash Flow, Capital Expenditure, and Leverage on Firm Value: The Moderating Role of CEO Tenure in Food and Beverage Companies Listed on the Indonesia Stock Exchange, 2021–2025
DOI:
https://doi.org/10.24905/icobis.v2i1.82Keywords:
Cash Holding, Free Cash Flow, Capital Expenditure, Leverage, Firm Value, CEO Power, CEO TenureAbstract
The food and beverage subsector is one of the manufacturing subsectors that showed positive growth and made a significant contribution to the Indonesian economy during 2021–2025. However, this growth was not always accompanied by an increase in firm value, as measured by Tobin’s Q, which continued to fluctuate throughout the study period. Furthermore, previous research on the effects of cash holding, capital expenditure, and leverage on firm value has shown inconsistent results. This study aims to analyze the effects of cash holding, free cash flow, capital expenditure, and leverage on firm value, with CEO power, proxied by CEO tenure, as a moderating variable, in food and beverage subsector companies listed on the Indonesia Stock Exchange during 2021–2025. This study employed a quantitative approach using secondary data obtained from companies’ financial statements and annual reports. Purposive sampling was used to select 40 companies, yielding 200 observations. The data were analyzed using panel data regression with a Random Effect model estimated with Robust Standard Errors, together with Moderated Regression Analysis (MRA). The results indicate that cash holding and free cash flow have no effect on firm value, whereas capital expenditure and leverage have a positive effect. Furthermore, CEO power (CEO tenure) moderates the effects of cash holding and leverage on firm value but does not moderate the effects of free cash flow and capital expenditure on firm value. It can be concluded that the increase in firm value in food and beverage subsector companies is influenced more by investment decisions and corporate financing policies. Furthermore, CEO managerial characteristics, as measured by CEO tenure, play a role in strengthening the influence of certain financial policies on firm value, particularly those related to cash management and the use of debt.
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