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Antecedents and Outcomes of Corporate Governance: Evidence from Indonesia

Author

Listed:
  • I.Khajar
  • H. Hersugondo
  • U. Udin

Abstract

This study empirically explores the relationship between three important decisions in financial theory and the business organization goals for 18 companies incorporated in the LQ-45 index listed on the Indonesia Stock Exchange (IDX) over the periods 2010-2017. The purpose of this study is to investigate the effect of investment opportunities, dividend policy and financial decision on firm value and to examine the contribution of corporate governance in moderating the effect between investment opportunities to firm value. This study employs panel data regression through Eviews 9 program specification methodology. The results of the panel data regression analysis indicate a positive and significant relationship between investment opportunities, financial decision, and firm value. The results also indicate that corporate governance has a significant negative moderating effect on investment decision to firm value.

Suggested Citation

  • I.Khajar & H. Hersugondo & U. Udin, 2018. "Antecedents and Outcomes of Corporate Governance: Evidence from Indonesia," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 480-492.
    • Handle: RePEc:ers:journl:v:xxi:y:2018:i:4:p:480-492
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    References listed on IDEAS

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    1. Eleni N. Giannakopoulou & Eleftherios I. Thalassinos & Theodoros V. Stamatopoulos, 2016. "Corporate governance in shipping: an overview," Maritime Policy & Management, Taylor & Francis Journals, vol. 43(1), pages 19-38, January.
    2. Joshua Abor, 2005. "The effect of capital structure on profitability: an empirical analysis of listed firms in Ghana," Journal of Risk Finance, Emerald Group Publishing, vol. 6(5), pages 438-445, November.
    3. Mohamed Nurullah & Lingesiya Kengatharan, 2015. "Capital budgeting practices: evidence from Sri Lanka," Journal of Advances in Management Research, Emerald Group Publishing Limited, vol. 12(1), pages 55-82, May.
    4. Dody Hapsoro & Tulus Suryanto, 2017. "Consequences of Going Concern Opinion for Financial Reports of Business Firms and Capital Markets with Auditor Reputation as a Moderation Variable - An Experimental Study," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 197-223.
    5. Li Liu & Wen Qu & Janto Haman, 2018. "Product market competition, state-ownership, corporate governance and firm performance," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 26(1), pages 62-83, February.
    6. Zangina Isshaq & Godfred A. Bokpin & Joseph Mensah Onumah, 2009. "Corporate governance, ownership structure, cash holdings, and firm value on the Ghana Stock Exchange," Journal of Risk Finance, Emerald Group Publishing, vol. 10(5), pages 488-499, November.
    7. Peter J. Baldacchino & Chantelle Camilleri & Simon Grima & Frank H. Bezzina, 2017. "Assessing Incentive and Monitoring Schemes in the Corporate Governance of Maltese Co-operatives," European Research Studies Journal, European Research Studies Journal, vol. 0(3A), pages 177-195.
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    Cited by:

    1. M. Chabachib & Aji Yudha & Hersugondo Hersugondo & Imang Dapit Pamungkas & Udin Udin, 2019. "The Role of Firm Size on Bank Liquidity and Performance: A Comparative Study of Domestic and Foreign Banks in Indonesia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(3), pages 96-105.
    2. Yenny Dwi Handayani & Ewing Yuvisa Ibrani, 2019. "Corporate Governance Application, Audit Quality and Audit Report Lag: The Moderating Role of Law Compliance," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 164-171, July.
    3. M. Chabachib & Tyana Ulfa Fitriana & Hersugondo Hersugondo & Imang Dapit Pamungkas & Udin Udin, 2019. "Firm Value Improvement Strategy, Corporate Social Responsibility, and Institutional Ownership," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 152-163, July.

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    More about this item

    Keywords

    Investment opportunities; dividend decision; financial decision; company value; good governance.;
    All these keywords.

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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