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Do ownership structures really matter? A study of companies listed on the Indonesia Stock Exchange

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  • Nila Firdausi Nuzula

    (Department of Business Administration, Universitas Brawijaya)

  • Chitra Sriyani De Silva Lokuwaduge

    (College of Business, Victoria University, Australia)

Abstract

Examining the ownership structure of Indonesian corporations and its contribution towards developing appropriate corporate governance is an interesting endeavour, as the country is putting a lot of effort in improving trusts and attracting more foreign investors. A concentrated ownership structure is a common feature in the Asia-Pacific region. For the present paper, an analysis was conducted centred on ownership structures and their impact on governance and firm value in Indonesia. Measurements for ownership structure were based on the percentages of institutional and managerial ownership, while independent commissioners, board of directors and audit committees were used to measure corporate governance and Tobin’s Q was used to measure firm value. The results of the study, which is based on secondary data gathered from all the companies listed on the Indonesia Stock Exchange from 2009 to 2016, reveals that ownership structure affects two measures used for corporate governance and firm value. As expected, ownership structure shows a statistically significant relationship with corporate governance.

Suggested Citation

  • Nila Firdausi Nuzula & Chitra Sriyani De Silva Lokuwaduge, 2017. "Do ownership structures really matter? A study of companies listed on the Indonesia Stock Exchange," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 24(1), pages 55-82, June.
    • Handle: RePEc:unt:jnapdj:v:24:y:2017:i:1:p:55-82
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    Cited by:

    1. Irine Herdjiono, 2019. "The differences of corporate governance influence on state-owned enterprise and non-state-owned entrerprise’s performance: the case of Indonesia," Journal of Financial Studies, Institute of Financial Studies, vol. 6(4), pages 83-93, June.

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    More about this item

    Keywords

    Corporate governance; institutional; managerial; ownership; firm value; Indonesia; share-market;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G19 - Financial Economics - - General Financial Markets - - - Other
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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