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The effect of ownership structure on the level of agency conflict: The moderating role of debt level

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  • Nur Mulyani Dwi Putri

    (Management Study Program, Faculty of Business and Economics, Universitas Islam Indonesia, Indonesia)

  • Nurfauziah Nurfauziah

    (Management Study Program, Faculty of Business and Economics, Universitas Islam Indonesia, Indonesia)

Abstract

This study aims to examine the effect of ownership structure on the level of agency conflict and examine the effect of corporate debt levels on the relationship between ownership structure and agency in manufacturing companies which is listed on the Indonesia Stock Exchange (IDX). In this study, researchers use two ownership structures, namely family ownership and insider ownership. The ownership structure is measured by the percentage of share ownership by family and insiders. The population of this study is all manufacturing companies listed on the IDX (Indonesian Stock Exchange) from 2017 to 2019. This study uses the purposive sampling technique. This study also has 19 companies with family ownership structures and 21 companies with insider ownership structures as samples. The data analysis technique uses descriptive statistical analysis by SPSS. The results of this study indicate that family ownership and insider ownership have a negative effect on the level of agency conflict in the company. In addition, this study also proves that the level of debt in the company strengthens the relationship between ownership structure and the level of agency conflict Key Words:Family Ownership, Insider Ownership, Agency Conflict, Debt Level

Suggested Citation

  • Nur Mulyani Dwi Putri & Nurfauziah Nurfauziah, 2022. "The effect of ownership structure on the level of agency conflict: The moderating role of debt level," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(5), pages 314-323, July.
    • Handle: RePEc:rbs:ijbrss:v:11:y:2022:i:5:p:314-323
    DOI: 10.20525/ijrbs.v11i5.1886
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    References listed on IDEAS

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    1. D. Agus Harjito & Nurfauziah Nurfauziah, 2006. "Hubungan Kebijakan Hutang, Insider Ownership dan Kebijakan Dividen dalam Mekanisme Pengawasan Masalah Agensi di Indonesia," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 10(2).
    2. Gao, Hao & He, Jing & Li, Yong & Qu, Yuanyu, 2020. "Family control and cost of debt: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 60(C).
    3. D. Agus Harjito & Nurfauziah Nurfauziah, 2006. "Hubungan Kebijakan Hutang, Insider Ownership Dan Kebijakan Dividen Dalam Mekanisme Pengawasan Masalah Agensi Di Indonesia," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 10(2), pages 121-136, Desember.
    4. Fuente, Gabriel de la & Velasco, Pilar, 2020. "Capital structure and corporate diversification: Is debt a panacea for the diversification discount?," Journal of Banking & Finance, Elsevier, vol. 111(C).
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