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

Nila Firdausi Nuzula and Chitra Sriyani De Silva Lokuwaduge
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Nila Firdausi Nuzula: Department of Business Administration, Universitas Brawijaya
Chitra Sriyani De Silva Lokuwaduge: College of Business, Victoria University, Australia

Asia-Pacific Development Journal, 2017, vol. 24, issue 1, 55-82

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.

Keywords: Corporate governance; institutional; managerial; ownership; firm value; Indonesia; share-market (search for similar items in EconPapers)
JEL-codes: G00 G19 G32 G39 O53 (search for similar items in EconPapers)
Date: 2017
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