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Do Traditional Accounting and Economic Value Added Mediate The Relationship Between Corporate Governance and Firm Value of Indonesian State-Owned Enterprises ?

Taufik Taufik, Tertiarto Wahyudi, Agung Putra Raneo, Mu'izzuddin Mu'izzuddin and Mohamad Adam
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Taufik Taufik: Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,
Tertiarto Wahyudi: Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,
Agung Putra Raneo: Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia
Mu'izzuddin Mu'izzuddin: Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,
Mohamad Adam: Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia.

International Journal of Economics and Financial Issues, 2018, vol. 8, issue 3, 118-126

Abstract: The purpose of this research was to know whether traditional accounting i.e. return on asset and economic value added mediated the relationship between corporate governance and firm value of Indonesian state-owned enterprises at Indonesian stock exchange from 2012 - 2016. The population of this research was 19 of Indonesian state-owned enterprises during 2012-2016. Based on the census of sampling method applied, 19 firms were selected as sample. Path Analysis was conducted to shows its direct and indirect effects of each path. The result showed that both traditional accounting i.e. return on asset and economic value added did not mediate the relationship between corporate governance and firm value of Indonesian state-owned enterprises at Indonesian stock exchange during 2012-2016. In other words, corporate governance did not effect indirectly on firm value through both traditional accounting i.e. return on asset and economic value added. Another interesting finding was that although economic value added was not as a mediation but it influenced firm value while traditional accounting i.e. return on asset had no effect on firm value.

Keywords: Corporate governance; Traditional accounting; Economic value added; Indonesian state-owned enterprises; Indonesian Stock Exchange. (search for similar items in EconPapers)
JEL-codes: G2 G20 L25 (search for similar items in EconPapers)
Date: 2018
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