The Effect Of Corporate Governance And Corporate Strategy On Family Firm Performance In Indonesia

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D. Agus Harjito
Adhitya Rechandy Christian Santoso
Carl B. McGowan, Jr.

Keywords

Family Ownership, Business Strategy, Corporate Performance

Abstract

This paper analyzes the influence of corporate governance and corporate strategy on the performance of family owned or controlled firms listed on the Indonesia Stock Exchange. The Corporate Governance proxy is Family Ownership and Independent Commissioner, and Corporate Strategy proxies are Diversification and Compensation Strategy of Directors. This study uses a sample of 70 companies that are family owned or controlled companies listed on the Indonesia Stock Exchange (IDX) from 2014 to 2018. Data analysis was performed using multiple linear regression methods. The results of this study indicate that family ownership has a significant negative effect on company performance (ROE). While diversification and compensation strategy of directors have no effect, firm performance is measured by ROE.

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