IDEAS home Printed from https://ideas.repec.org/a/lif/jrgelg/v8y2019p730-738.html
   My bibliography  Save this article

Supervisory Board and Company Borrowing: The Case of Developing Economics

Author

Listed:
  • Zaitul

    (Economics Faculty and Business, Universitas Bung Hatta, Padang, Indonesia)

  • Desi Ilona
  • Ethika

Abstract

The objective of this paper is to find out the effects of the independence and size of the supervisory board on company borrowing in a two-tier board system. Unlike prior studies, such as in the United States, the current study is conducted in a developing country that has adapted a Continental European System. This study uses panel data analysis for 1,981 observations of 283 Indonesian listed companies in the 2004-2010 period. The control variables are Return on Assets (ROA), quality of audit, age, size and firm growth. Before panel data analysis is run, the outlier and normality tests are used. In addition, test of random-effect or fixed-effect model is conducted. This work finds that supervisory board independence has a negative effect on company borrowing. Further, firm profitability has a consistent effect on company borrowing.

Suggested Citation

  • Zaitul & Desi Ilona & Ethika, 2019. "Supervisory Board and Company Borrowing: The Case of Developing Economics," Journal of Reviews on Global Economics, Lifescience Global, vol. 8, pages 730-738.
    • Handle: RePEc:lif:jrgelg:v:8:y:2019:p:730-738
    as

    Download full text from publisher

    File URL: https://lifescienceglobal.com/independent-journals/journal-of-reviews-on-global-economics/volume-8/85-abstract/jrge/3668-abstract-supervisory-board-and-company-borrowing-the-case-of-developing-economics
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lif:jrgelg:v:8:y:2019:p:730-738. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Faisal Ameer Khan (email available below). General contact details of provider: http://www.lifescienceglobal.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.