Does Corporate Governance improve Financial Performance? Case of Manufacturing Companies Listed in Indonesia Stock Exchange

Ryanda Saputra, Indayani Indayani

Abstract


Objective – This study aims to determine the effect of corporate governance on financial performance with the ownership structure as a moderating variable.

 

Design/methodology – The sample was selected using a purposive sampling method involving manufacturing companies listed on Indonesia stock exchange for the period of 2014-2017. Financial performance is measured by ROE, corporate governance is proxied by a CGPI score between 1 - 100 which has been rated from the results of evaluating the implementation of GCG in companies by IICG, managerial ownership is calculated by comparing the number of managerial shares with the number of outstanding shares, institutional ownership is calculated by comparison of the number of institutional shares with number of shares outstanding, public ownership is calculated by comparing the number of public shares with the number of shares outstanding. The data analysis technique used is the descriptive statistical test, classic assumption test, and multiple linear regression analysis.

 

Results – The results show that corporate governance has a significant effect on financial performance, the relationship between managerial, institutional and public ownership structures with corporate governance has a positive and significant effect on financial performance. Managerial and public ownership are not able to strengthen the effect of corporate governance on financial performance, while other variables namely institutional ownership can strengthen the effect of corporate governance on financial performance.

 

Research limitations/implications – The conclusions drawn are only based on the selected years of observation hence it may not reflect the actual phenomenon. Another limitation is due to the companies studied were only manufacturing companies even though there are still many other companies listed on the Indonesia Stock Exchange with a longer observation period.


Keywords


coorporate governance; ownership structure; financial performance

Full Text:

PDF

References


(IAI), I. A. I. (2007). Standar Akuntansi Keuangan. Jakarta: Salemba Empat.

Ardy, W. Y. (2013). Pengaruh struktur kepemilikan terhadap kinerja perusahaan manufaktur di indonesia. Fakultas Ekonomi dan Bisnis Universitas Kriten Satya Wacana.

Atmaja, S. L. (2016). Teori Keagenan dan GCG.

Bathala, C. T., Moon, K. P., & Rao, R. (1994). Manajerial ownership, debt policy, and the impact of institutional holdings: An Agency Perspective. Financial Management, 23(3), 38–50.

Born, S. G. (2016). Management Invesment: Analysis (Fourth edi). New York: McGraw-Hill International – Finance Series.

Faizal. (2004). Analisis agency costs, struktur kepemilikan dan mekanisme corporate governance. Simposium Nasional Akuntansi VII, Denpasar Bali, 2-3 Desember.

Fernando, C. S., Gatchev, V. A., & Spindt, P. A. (2012). Institutional ownership, analyst following, and share pricespages. Journal of Banking & Finance, 36(8), 2175–2189.

Fosu. (2013). Capital structure, product market competition and firm performance: evidance from South Africa. The Quaterly Review Of Economics And Finance, 53, 140–151.

Guo, H. (2006). The risk‐return relation in International Stock Markets. The Financial Review, 41(4).

Hastuti, T. D. (2005). Hubungan antara good corporate governance dan struktur kepemilikan dengan kinerja keuangan (Studi kasus pada perusahaan yang listing di Bursa Efek Jakarta). SNA VIII Solo, 15 – 16 September 2005.

Hilmi, U., & Ali. (2008). Analisis faktor-faktor yang mempengaruhi ketepatan waktu penyampaian laporan keuangan (Studi empiris pada perusahaan-perusahaan yang terdaftar di BEJ periode 2004-2006). Simposium Nasional Akuntansi XI Pontianak, 1–26.

Iskander, M. R., & Chamlou, N. (2000). Corporate governance: A Framework for implementation.

Ismiyanti, F., & Hanafi, M. M. (2003). Kepemilikan manajerial, kepemilikan institusional, risiko, kebijakan utang dan kebijakan dividen: analisis persamaan simultan. Simposium Nasional Akuntansi VI, Surabaya, 260–277.

Kerlinger, F. N., & Lee, H. B. (2000). Foundations of behavioral research (4th Editio). Holt, NY: Harcourt College Publishers.

Lin, Y. R., & Fu, X. M. (2017). Does institutional ownership influenze firm performance? evidance from China. International Review of Economics and Finance, 49, 17–57.

Margaritis, D., & Psillaki, M. (2010). Capital structure, equity ownership and firm performance. Journal of Banking and Finance, 34, 621–632.

Noe, R. A. (1996). Is career management related to employee development and performance? Journal of Organizational Behaviour, 17(2).

Pancawati, H. (2009). Determinasi nilai perusahaan. Jurnal JAI, 5(2), 231–250.

Permanasari, W. I. (2010). Pengaruh kepemilikan manajerial, kepemilikan institusional, dan corpotate social responsibility terhadap nilai perusahaan. Fakultas Ekonomi Universitas Diponegoro.

Petronila, A. T., & Mukhlasin. (2003). Pengaruh profitabilitas perusahaan terhadap ketepatan waktu pelaporan laporan keuangan dengan opini audit sebagai variabel moderating. Jurnal Ekonomi Dan Bisnis.

Sayidah, N. (2007). Pengaruh kualitas corporate governance terhadap kinerja perusahaan publik (Studi kasus peringkat 10 besar CGPI tahun 2003,2004, 2005). JAAI, 11(1), 1–19.

Sekaran, & Bougie. (2013). Research Methods for Business: A skill Building Approach (Edisi 5). New York: John Wiley.

Shleifer, A., & Vishny, R. W. (1997). A Survey of corporate governance. Journal of Finance, 52(2), 737–783.

Sucipto. (2013). Penilaian kinerja keuangan. Jurnal Ekonomi Bisnis Universitas Utara.

Suharli, M. (2006). Studi empiris mengenai pengaruh profitabilitas, leverage, dan harga saham terhadap jumlah dividen tunai (Studi pada Perusahaan yang terdaftar di Bursa Efek Jakarta periode 2002-2003). Jurnal Manajemen, Akuntansi, Dan Sistem Informasi, 6(2).

Sujoko, & Soebiantoro, U. (2007). Pengaruh struktur kepemilikan saham, leverage, faktor interen dan faktor eksteren terhadap nilai perusahan. Jurnal Manajemen Dan Kewirausahaan, 9(1).

Suranta, E., & Merdistusi, P. P. (2004). Income smoothing, tobin’s q, agency problems dan kinerja perusahaan. SNA VII Desember, 2 - 3 Desember 2004.

Taqwa, S., Sugiyanto, F., & Daljono. (2003). Faktor-faktor yang mempengaruhi pemilihan metode akuntansi persediaan pada perusahaan manufaktur di BEJ. Jurnal Riset Akuntansi Indonesia, 2, 100–118.

Tarjo. (2008). Pengaruh konsentrasi kepemilikan institusional dan leverage terhadap manajemen laba, nilai pemegang saham serta cost of equity capital. Simposium Nasional XI Pontianak, 8(3), 1–45.

Tarjo, & Sulistyowati, I. A. (2005). Pengaruh leverage dan kepemilikan saham terhadap earning management pada perusahaan go public di Bursa Efek Jakarta. Prosiding Simposium Nasional Mahasiswa Dan Alumni Pascasarjana Ilmu Ilmu Ekonomi.

Thesarani, N. J. (2017). Pengaruh ukuran dewan komisaris, kepemilikan manajerial, kepemilikan institusional dan komite audit terhadap struktur modal. Jurnal NOMINAL, VI(2).

Thomsen, S., & Pedersen, T. (2000). Ownership structure and economic performance in the largest european companies. Strategic Management Journal, 21(6), 689–705.

Trisnaningsih, S. (2007). Independensi auditor dan komitmen organisasi sebagai mediasi pengaruh pemahaman good corporate governance, gaya kepemimpinan dan budaya organisasi terhadap kinerja auditor. Simposium Nasional Akuntansi.

Tussiana, A. A., & Lastanti, H. S. (2016). Pengaruh independensi, kualitas audit, spesialisasi industri auditor dan corporate governance terhadap integritas laporan keuangan. Media Riset Akuntansi, Auditing & Informasi, 16(1), 69–78.

Zeitun, R., & Tian, G. G. (2007). Capital structure and corporate performance: evidence from Jordan. Australasian Accounting, Business and Finance Journal, 1(4).




DOI: https://doi.org/10.24815/jaroe.v2i2.14318

Refbacks

  • There are currently no refbacks.


Published by:

Accounting Department
Economics and Business Faculty
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
E-ISSN: 2621-1041

 

Creative Commons License
Journal of Accounting Research, Organization and Economics by Accounting Department of Economics and Business Faculty of Syiah Kuala University is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Based on a work at http://www.jurnal.unsyiah.ac.id/JAROE/index.