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Corporate Governance, State Ownership and Firm Performance: An Empirical Study of State-Owned Enterprises in Indonesia

Author

Listed:
  • Chermian Eforis

    (Universitas Multimedia Nusantara, Scientia Garden-Gading Serpong, 15820, Tangerang, Indonesia)

Abstract

Objective � The purpose of this research is to determine the effect of good corporate governance (GCG) on Indonesia's SOEs and the influence of state ownership on company performance. Methodology/Technique � This study examines State Owned Enterprises in Indonesia that were listed on the Indonesia Stock Exchange between 2011 and 2015. Findings � The empirical results show that GCG and state ownership both have a positive influence on the company's financial performance (in this case, Return On Assets). However, the percentage of state ownership has a negative effect on the relationship between Good Corporate Governance and Return On Assets. Novelty � One agency cost is monitoring expenditure by the principal. Privatization is one way to improve the performance of SOEs. Privatization is believed to improve the performance of SOEs, as a result of increased supervision of the performance of SOEs in Indonesia.

Suggested Citation

  • Chermian Eforis, 2018. "Corporate Governance, State Ownership and Firm Performance: An Empirical Study of State-Owned Enterprises in Indonesia," GATR Journals afr154, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr154
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    Citations

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    Cited by:

    1. Miążek Radosław, 2021. "Corporate governance in state-owned enterprises. A systematic literature review: an international perspective," International Journal of Contemporary Management, Sciendo, vol. 57(4), pages 1-13, December.
    2. Quan Tran & Anh‐Tuan Doan & Thao Tran, 2022. "What are the drivers of SMEs' financial performance? The interaction of intellectual capital and ownership," Australian Economic Papers, Wiley Blackwell, vol. 61(4), pages 751-777, December.
    3. Muhamad, Goran M. & Heshmati, Almas & Khayyat, Nabaz T., 2021. "How to reduce the degree of dependency on natural resources?," Resources Policy, Elsevier, vol. 72(C).
    4. Ria Ria, 2023. "Determinant Factors of Corporate Governance on Company Performance: Mediating Role of Capital Structure," Sustainability, MDPI, vol. 15(3), pages 1-14, January.
    5. Quan Tran & Anh‐Tuan Doan & Thao Tran, 2021. "Small and medium enterprises' credit access, ownership structure and job development," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 710-735, December.
    6. Miążek Radosław, 2023. "Control-Enhancing Mechanisms in State-Owned Companies – Analysis of Companies Listed on the Warsaw Stock Exchange," International Journal of Contemporary Management, Sciendo, vol. 59(3), pages 65-77, September.

    More about this item

    Keywords

    State Owned Enterprises; Good Corporate Governance; State Ownership; Return On Assets; Indonesia.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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