Does internationalization moderates the effect of SMEs size, age, and other financial determinants on its investment opportunities set? Evidence from Indonesia

Yuli Soesetio, Dyah Arini Rudhiningtyas, Sudarmiatin Sudarmiatin, Imam Mukhlis

Abstract


Small and medium-sized enterprises (SMEs) are increasingly considering international expansion as one of sustainable growth strategic options. This study aims to reveal how the effect of internationalization as moderator of SMEs size, age, and other financial determinants toward investment opportunity set of SMEs that listed on the Indonesia Stock Exchange (IDX) from 2006 to 2020. Market to book asset ratio used as a proxy of investment opportunity set of SMEs. This study is one of the most important in the context of Indonesia SMEs as there were limited previous studies that have explored internationalization factor. A total of 102 SMEs companies with 156 of data observation were studied. A moderation regression analysis was used to test whether determinants of investment opportunity set was statistically significant. Surprisingly, while the moderation role of internationalization on the relationship between SMEs size, age, and market to book asset ratio was successfully proved in this study, the direct effect of internationalization of SMEs on its investment opportunity set was failed to prove.

Keywords


Internationalization; Gross National Product; Inflation; Investment Opportunity Set; Market to Book Asset Ratio



DOI: http://dx.doi.org/10.31106/jema.v18i2.10393

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JEMA: Jurnal Ilmiah Bidang Akuntansi dan Manajemen is licensed under a Creative Commons Attribution 4.0 International License