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The Effect of Corporate Governance on Financial Performance in Non-Financial LQ-45 Firms Listed on the Indonesian Stock Exchange from 2012 to 2017

Author

Listed:
  • Erika Jimena Arilyn

    (Trisakti School of Management, Jakarta - Indonesia Author-2-Name: Beny Author-2-Workplace-Name: Trisakti School of Management, Jakarta - Indonesia Author-3-Name: Emir Kharismar Author-3-Workplace-Name: Trisakti School of Management, Jakarta - Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)

Abstract

Objective � This research is conducted in order to determine what factors in corporate governance affect the financial performance of a firm. Methodology/Technique � Financial performance, as the dependent variable, is measured by Return on Asset (ROA), while the independent variables (corporate governance) are measured using Board Independence, Board Size, Dividend, Firm Size, and Financial Leverage. The sampling method used in this research is purposive sampling. The requirements for the sample of this research are the non � financial firms included in LQ-45 from 2012 to 2017 that publish annual reports that are available to the public. The research method used in this paper is a quantitative method. Panel data analysis technique and E-views tools were also used. Findings � The results indicate that firm size and percentage of board independence has no effect on financial performance, while board size, dividends, and financial leverage all effect financial performance. Novelty � The study adds to the literature of corporate government and firm performance in emerging countries. Type of Paper: Empirical.

Suggested Citation

  • Erika Jimena Arilyn, 2019. "The Effect of Corporate Governance on Financial Performance in Non-Financial LQ-45 Firms Listed on the Indonesian Stock Exchange from 2012 to 2017," GATR Journals afr170, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:afr170
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    References listed on IDEAS

    as
    1. Kieschnick, Robert & Moussawi, Rabih, 2018. "Firm age, corporate governance, and capital structure choices," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 597-614.
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    More about this item

    Keywords

    Board Independence; Board Size; Dividends; Firm Size; Financial Leverage; Financial Performance.;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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