Human Capital Culture and Firm Value in Indonesia’s Agribusiness: Aligning HRM Practices with Sustainable Development Goals

Abstract

This study explores the impact of human capital culture on firm value within Indonesia's agribusiness sector, focusing on employee compensation, care, and training. In alignment with Sustainable Development Goals (SDGs) and Indonesia's Vision 2045, the research examines how these human resource management (HRM) practices influence two key financial metrics: market value and total assets. Using secondary data from 2019 to 2023, the study applies panel data regression to assess the effects of compensation, employee care,training and earnings after tax (EAT) on firm value. The findings reveal that compensation significantly impacts both market value and total assets, while EAT positively influences market value. However, the effect of training on firm value is not immediately observable, suggesting a lagged impact. These results underscore the critical role of employee compensation in enhancing organizational performance and financial outcomes in agribusiness. The study provides valuable insights for policymakers and industry leaders aiming to align HRM practices with sustainable economic growth.