Dividends, Investment Opportunities, and Company Performance: The Moderating Role of Corporate Governance

https://doi.org/10.35912/jakman.v7i1.5338
Published: Dec 10, 2025

Abstract:

Purpose: This study aims to analyze the influence of dividend policy and investment opportunities set on firm performance, with corporate governance as a moderating variable. The study focuses on mining sector companies listed on the Indonesia Stock Exchange during the 2021–2024 period.

Methodology/approach: This study is quantitative approach. Firm performance is proxied by Return on Equity, dividend policy by Dividend Payout Ratio, and IOS by the ratio of capital expenditure to total assets. Corporate governance is assessed through an index comprising 17 indicators aligned with the principles of Good Corporate Governance. Data analysis was conducted using panel data moderation regression with the Generalized Least Squares.

Results/findings: The results indicate that dividend policy tends to positively influence ROE, whereas IOS shows no direct significant impact on ROE. Conversely, corporate governance negatively moderates the relationship between dividend policy and ROE, suggesting that stricter corporate governance weakens the positive effect of dividend policy on firm performance. However, corporate governance does not significantly moderate the relationship between IOS and ROE

Conclusion: Dividends positively affect ROE; IOS has no direct effect; governance weakens the dividend effect on ROE but does not moderate the IOS–ROE relationship.

Limitations: This research was limited to mining companies in Indonesia. Therefore, the results are limited to one industry and cannot be generalized to all companies in Indonesia.

Contribution: This study offers practical implications, emphasizing that management of mining companies should carefully design balanced dividend policies, considering their long-term effects and highlighting the importance of effective corporate governance implementation.

Keywords:
1. Corporate Governance
2. Dividend Policy
3. Investment Opportunities Set
4. Mining Sector
5. Return on Equity
Authors:
1 . Bunga Triandolla
2 . Antonius Herusetya
View PDF
How to Cite
Triandolla, B., & Herusetya, A. (2025). Dividends, Investment Opportunities, and Company Performance: The Moderating Role of Corporate Governance. Jurnal Akuntansi, Keuangan, Dan Manajemen, 7(1), 343–355. https://doi.org/10.35912/jakman.v7i1.5338
Download Citation
  1. Endnote/Zotero/Mendeley (RIS)
  2. BibTeX

Downloads

Download data is not yet available.
Issue & Section
Vol. 7 No. 1 (2025): Desember
Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

References

    References

    Annesi, N., Battaglia, M., Ceglia, I., & Mercuri, F. (2025). Navigating paradoxes: Building a sustainable strategy for an integrated ESG corporate governance. Management Decision, 63(2), 531-559. doi:https://doi.org/10.1108/MD-10-2023-2006

    Basit, A. (2020). Pengaruh harga emas dan minyak dunia terhadap Indeks Harga Saham Gabungan (IHSG) periode 2016-2019. REVENUE: Jurnal Manajemen Bisnis Islam, 1(2), 95-110. doi:https://doi.org/10.24042/revenue.v1i2.6073

    Basuony, M. A., Zaher, A. A., Bouaddi, M., & Noureldin, N. (2023). Sustainability, corporate governance, and firm performance: Evidence from emerging markets. Corporate Ownership and Control, 20(3), 268-276. doi:https://doi.org/10.22495/cocv20i3siart3

    Benkraiem, R., Berrich, O., Lakhal, N., Nizar, H., & Lakhal, F. (2025). Balancing ecology and finance: The impact of carbon performance on dividend payout policy. Research in International Business and Finance, 74, 102710. doi:https://doi.org/10.1016/j.ribaf.2024.102710

    Chosiah, C., Purwanto, B., & Ermawati, W. J. (2019). Dividend policy, investment opportunity set, free cash flow, and company performance: Indonesian’s agricultural sector. Jurnal Keuangan dan Perbankan, 23(3), 403-417. doi:https://doi.org/10.26905/jkdp.v23i3.2517

    Connelly, B. L., Certo, S. T., Reutzel, C. R., DesJardine, M. R., & Zhou, Y. S. (2025). Signaling theory: state of the theory and its future. Journal of Management, 51(1), 24-61. doi:https://doi.org/10.1177/01492063241268459

    Dechow, P. M., Hutton, A. P., Kim, J. H., & Sloan, R. G. (2012). Detecting earnings management: A new approach. Journal of accounting research, 50(2), 275-334. doi:https://doi.org/10.1111/j.1475-679X.2012.00449.x

    Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A decision tree approach. Expert systems with applications, 40(10), 3970-3983. doi:https://doi.org/10.1016/j.eswa.2013.01.012

    Dewasiri, N. J., Baker, H. K., Banda, Y. W., & Rathnasiri, M. S. H. (2022). The dividend decision model: A possible solution for the dividend puzzle Exploring the latest trends in management literature (pp. 249-267): Emerald Publishing Limited.

    Dorothy, P., & Endri, E. (2024). Environmental, social and governance disclosure and firm value in the energy sector: The moderating role of profitability. Problems and Perspectives in Management, 22(4), 588. doi:https://doi.org/10.21511/ppm.22(4).2024.44

    Estefania, E., Sativa, E., & Noorliana, E. (2021). Analisis pertumbuhan PDB Indonesia melalui pengembangan sektor pertambangan. Jurnal Indonesia Sosial Sains, 2(5), 465557. doi:https://doi.org/10.36418/jiss.v2i5.293

    Farooq, M., Ahmed, A., Khan, I., & Munir, M. (2025). Impact of dividend policy on corporate social responsibility: the role of board governance mechanism. Journal of Global Responsibility, 16(1), 52-77. doi:https://doi.org/10.1108/JGR-08-2023-0135

    Farooq, M., Khan, I., Kainat, M., & Mumtaz, A. (2025). Corporate social responsibility and firm value: the role of enterprise risk management and corporate governance. Corporate Governance: the international journal of business in society, 25(3), 631-663. doi:https://doi.org/10.1108/CG-08-2023-0341

    Hafsyah, A. N., Mersela, M., & Lestari, H. S. (2022). Pengaruh corporate governance terhadap agency cost pada perusahaan manufaktur yang terdaftar di BEI. Jurnal Ekonomi, 27(1), 34-48. doi:https://doi.org/10.24912/je.v27i1.852

    Hilman, C., & Laturette, K. (2021). Analisis perbedaan kinerja perusahaan sebelum dan saat pandemi covid-19. BALANCE: Jurnal Akuntansi, Auditing Dan Keuangan, 18(1), 91-109. doi:https://doi.org/10.25170/balance.v18i1.2659

    Khatib, S. F. (2025). An assessment of methods to deal with endogeneity in corporate governance and reporting research. Corporate Governance: the international journal of business in society, 25(3), 606-630. doi:https://doi.org/10.1108/CG-12-2023-0507

    Kodriyah, K., Mahardini, N. Y., Malik, A., & Wulandari, M. Kebijakan Deviden dalam Memediasi Faktor yang Mempengaruhi Nilai Perusahaan. Studi Akuntansi, Keuangan, dan Manajemen, 4(2), 391-404. doi:https://doi.org/10.35912/sakman.v4i2.3796

    Lestari, W. D. Y., & Tumirin, T. (2024). Pengaruh Good Corporate Governance (GCG), Investment Opportunity Set (IOS) dan Risiko Keuangan Terhadap Nilai Perusahaan. Jurnal Riset Ekonomi dan Akuntansi, 2(3), 43-64. doi:https://doi.org/10.54066/jrea-itb.v2i3.2135

    Liviani, R., & Rachman, Y. T. (2021). The influence of leverage, sales growth, and dividend policy on company value. International Journal of Financial, Accounting, and Management, 3(2), 165-178. doi:https://doi.org/10.35912/ijfam.v3i2.189

    Nguyen, H. V., Dang, H. N., & Dau, H. H. (2021). Influence of corporate governance on dividend policy in Vietnam. The Journal of Asian Finance, Economics and Business, 8(2), 893-902. doi:https://doi.org/10.13106/jafeb.2021.vol8.no2.0893

    Njoku, O. E., & Lee, Y. (2024). Revisiting the effect of dividend policy on firm performance and value: Empirical evidence from the Korean market. International Journal of Financial Studies, 12(1), 22. doi:https://doi.org/10.3390/ijfs12010022

    Nurlatifah, S. (2024). Investment Opportunity Set (Ios): Between Opportunities and Threats for Pharmaceutical Companies in Indonesia. Journal Markcount Finance, 2(1), 142-157. doi:https://doi.org/10.70177/jmf.v2i1.662

    Prastyo, E. W. Z., & Setiartiti, L. (2018). Analisis Determinasi Harga Komoditas Pertambangan Terhadap Indeks Mining di IHSG (Indeks Harga Saham Gabungan) Periode Januari 2016–Agustus 2017. Journal of Economics Research and Social Sciences, 2(1), 13-22. doi:https://doi.org/10.18196/jerss.v2i1.9947

    Sholikhah, Z., & Baroroh, N. (2021). The roles of capital intensity in moderating managerial ownership and investment opportunity set (IOS) on accounting conservatism. Accounting Analysis Journal, 10(1), 25-31. doi:https://doi.org/10.15294/aaj.v10i1.40114

    Surifah. (2010). ARRANGING THE INDEX OF CORPORATE GOVERNANCE. Jurnal Dinamika Manajemen, 1(2), 1-16. doi:https://doi.org/10.15294/jdm.v2i1.2483

    Utami, R. P., Muhamad Muslih, S., & MM, C. (2022). The effect of total asset turnover ratio, return on asset, and dividend policy on the investment opportunity set (IOS). Paper presented at the International Conference on Industrial Engineering and Operations Management.

    Whetyningtyas, A., Arumsari, N. R., Ashari, & Mulyani, S. (2023). Profitability and growth opportunity: Impact on company value. International Journal of Financial, Accounting, and Management, 1(2), 114-132. doi:https://doi.org/10.35912/ijfam.v6i4.2614

    Xia, H., Tian, Y., Zhang, J. Z., & Liu, Y. (2025). Exploring the impact of online news sentiment and relevance on stock market risks: A signalling theory perspective. Expert Systems, 42(1), e13364. doi:https://doi.org/10.1111/exsy.13364

  1. References
  2. Annesi, N., Battaglia, M., Ceglia, I., & Mercuri, F. (2025). Navigating paradoxes: Building a sustainable strategy for an integrated ESG corporate governance. Management Decision, 63(2), 531-559. doi:https://doi.org/10.1108/MD-10-2023-2006
  3. Basit, A. (2020). Pengaruh harga emas dan minyak dunia terhadap Indeks Harga Saham Gabungan (IHSG) periode 2016-2019. REVENUE: Jurnal Manajemen Bisnis Islam, 1(2), 95-110. doi:https://doi.org/10.24042/revenue.v1i2.6073
  4. Basuony, M. A., Zaher, A. A., Bouaddi, M., & Noureldin, N. (2023). Sustainability, corporate governance, and firm performance: Evidence from emerging markets. Corporate Ownership and Control, 20(3), 268-276. doi:https://doi.org/10.22495/cocv20i3siart3
  5. Benkraiem, R., Berrich, O., Lakhal, N., Nizar, H., & Lakhal, F. (2025). Balancing ecology and finance: The impact of carbon performance on dividend payout policy. Research in International Business and Finance, 74, 102710. doi:https://doi.org/10.1016/j.ribaf.2024.102710
  6. Chosiah, C., Purwanto, B., & Ermawati, W. J. (2019). Dividend policy, investment opportunity set, free cash flow, and company performance: Indonesian’s agricultural sector. Jurnal Keuangan dan Perbankan, 23(3), 403-417. doi:https://doi.org/10.26905/jkdp.v23i3.2517
  7. Connelly, B. L., Certo, S. T., Reutzel, C. R., DesJardine, M. R., & Zhou, Y. S. (2025). Signaling theory: state of the theory and its future. Journal of Management, 51(1), 24-61. doi:https://doi.org/10.1177/01492063241268459
  8. Dechow, P. M., Hutton, A. P., Kim, J. H., & Sloan, R. G. (2012). Detecting earnings management: A new approach. Journal of accounting research, 50(2), 275-334. doi:https://doi.org/10.1111/j.1475-679X.2012.00449.x
  9. Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A decision tree approach. Expert systems with applications, 40(10), 3970-3983. doi:https://doi.org/10.1016/j.eswa.2013.01.012
  10. Dewasiri, N. J., Baker, H. K., Banda, Y. W., & Rathnasiri, M. S. H. (2022). The dividend decision model: A possible solution for the dividend puzzle Exploring the latest trends in management literature (pp. 249-267): Emerald Publishing Limited.
  11. Dorothy, P., & Endri, E. (2024). Environmental, social and governance disclosure and firm value in the energy sector: The moderating role of profitability. Problems and Perspectives in Management, 22(4), 588. doi:https://doi.org/10.21511/ppm.22(4).2024.44
  12. Estefania, E., Sativa, E., & Noorliana, E. (2021). Analisis pertumbuhan PDB Indonesia melalui pengembangan sektor pertambangan. Jurnal Indonesia Sosial Sains, 2(5), 465557. doi:https://doi.org/10.36418/jiss.v2i5.293
  13. Farooq, M., Ahmed, A., Khan, I., & Munir, M. (2025). Impact of dividend policy on corporate social responsibility: the role of board governance mechanism. Journal of Global Responsibility, 16(1), 52-77. doi:https://doi.org/10.1108/JGR-08-2023-0135
  14. Farooq, M., Khan, I., Kainat, M., & Mumtaz, A. (2025). Corporate social responsibility and firm value: the role of enterprise risk management and corporate governance. Corporate Governance: the international journal of business in society, 25(3), 631-663. doi:https://doi.org/10.1108/CG-08-2023-0341
  15. Hafsyah, A. N., Mersela, M., & Lestari, H. S. (2022). Pengaruh corporate governance terhadap agency cost pada perusahaan manufaktur yang terdaftar di BEI. Jurnal Ekonomi, 27(1), 34-48. doi:https://doi.org/10.24912/je.v27i1.852
  16. Hilman, C., & Laturette, K. (2021). Analisis perbedaan kinerja perusahaan sebelum dan saat pandemi covid-19. BALANCE: Jurnal Akuntansi, Auditing Dan Keuangan, 18(1), 91-109. doi:https://doi.org/10.25170/balance.v18i1.2659
  17. Khatib, S. F. (2025). An assessment of methods to deal with endogeneity in corporate governance and reporting research. Corporate Governance: the international journal of business in society, 25(3), 606-630. doi:https://doi.org/10.1108/CG-12-2023-0507
  18. Kodriyah, K., Mahardini, N. Y., Malik, A., & Wulandari, M. Kebijakan Deviden dalam Memediasi Faktor yang Mempengaruhi Nilai Perusahaan. Studi Akuntansi, Keuangan, dan Manajemen, 4(2), 391-404. doi:https://doi.org/10.35912/sakman.v4i2.3796
  19. Lestari, W. D. Y., & Tumirin, T. (2024). Pengaruh Good Corporate Governance (GCG), Investment Opportunity Set (IOS) dan Risiko Keuangan Terhadap Nilai Perusahaan. Jurnal Riset Ekonomi dan Akuntansi, 2(3), 43-64. doi:https://doi.org/10.54066/jrea-itb.v2i3.2135
  20. Liviani, R., & Rachman, Y. T. (2021). The influence of leverage, sales growth, and dividend policy on company value. International Journal of Financial, Accounting, and Management, 3(2), 165-178. doi:https://doi.org/10.35912/ijfam.v3i2.189
  21. Nguyen, H. V., Dang, H. N., & Dau, H. H. (2021). Influence of corporate governance on dividend policy in Vietnam. The Journal of Asian Finance, Economics and Business, 8(2), 893-902. doi:https://doi.org/10.13106/jafeb.2021.vol8.no2.0893
  22. Njoku, O. E., & Lee, Y. (2024). Revisiting the effect of dividend policy on firm performance and value: Empirical evidence from the Korean market. International Journal of Financial Studies, 12(1), 22. doi:https://doi.org/10.3390/ijfs12010022
  23. Nurlatifah, S. (2024). Investment Opportunity Set (Ios): Between Opportunities and Threats for Pharmaceutical Companies in Indonesia. Journal Markcount Finance, 2(1), 142-157. doi:https://doi.org/10.70177/jmf.v2i1.662
  24. Prastyo, E. W. Z., & Setiartiti, L. (2018). Analisis Determinasi Harga Komoditas Pertambangan Terhadap Indeks Mining di IHSG (Indeks Harga Saham Gabungan) Periode Januari 2016–Agustus 2017. Journal of Economics Research and Social Sciences, 2(1), 13-22. doi:https://doi.org/10.18196/jerss.v2i1.9947
  25. Sholikhah, Z., & Baroroh, N. (2021). The roles of capital intensity in moderating managerial ownership and investment opportunity set (IOS) on accounting conservatism. Accounting Analysis Journal, 10(1), 25-31. doi:https://doi.org/10.15294/aaj.v10i1.40114
  26. Surifah. (2010). ARRANGING THE INDEX OF CORPORATE GOVERNANCE. Jurnal Dinamika Manajemen, 1(2), 1-16. doi:https://doi.org/10.15294/jdm.v2i1.2483
  27. Utami, R. P., Muhamad Muslih, S., & MM, C. (2022). The effect of total asset turnover ratio, return on asset, and dividend policy on the investment opportunity set (IOS). Paper presented at the International Conference on Industrial Engineering and Operations Management.
  28. Whetyningtyas, A., Arumsari, N. R., Ashari, & Mulyani, S. (2023). Profitability and growth opportunity: Impact on company value. International Journal of Financial, Accounting, and Management, 1(2), 114-132. doi:https://doi.org/10.35912/ijfam.v6i4.2614
  29. Xia, H., Tian, Y., Zhang, J. Z., & Liu, Y. (2025). Exploring the impact of online news sentiment and relevance on stock market risks: A signalling theory perspective. Expert Systems, 42(1), e13364. doi:https://doi.org/10.1111/exsy.13364