10Sep 2017

THE IMPACT OF PUBLIC OWNERSHIP AS ANTECEDENT VARIABLE ON CORPORATE GOVERNANCE EFFECTIVENESS: INDONESIAN CASE.

  • Doctoral Program, Postgraduate School, Widya Mandala Catholic University Surabaya.
  • Faculty of Economics and Business, Airlangga University Surabaya.
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Background: Public ownership in Indonesia is still low compared to other ASEAN countries such as Singapore, Thailand and Malaysia. This study aims to prove that agency conflict between principal and agent can be minimized through corporate governance. Research method: This study used partial least squares (PLS) to examine the structural effects of latent variables. Population of this study is manufacturing companies of 460 companies. Using purposive sampling, the sample is 176 companies during 2011-2012. Results: (1) public ownership is an antecedent variables that promote the effectiveness of corporate governance, (2) corporate governance has a role to mediate the influence of public ownership on performance, (3) corporate governance practices have greater mediation role than corporate governance component, and (4) the impact of public ownership indirectly through corporate governance practices on market performance is greater than operational performance. Conclusion: Overall, the results of this study recommend the importance of implementing corporate governance in public companies in improving performance.

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[ Iwan Winardi, Arsono Laksmana and Dyna Rachmawati. (2017); THE IMPACT OF PUBLIC OWNERSHIP AS ANTECEDENT VARIABLE ON CORPORATE GOVERNANCE EFFECTIVENESS: INDONESIAN CASE. Int. J. of Adv. Res. 5 (Sep). 217-229] (ISSN 2320-5407). www.journalijar.com

Dr. Dyna Rachmawati
Accounting Department Faculty of Business Widya Mandala Catholic University Surabaya

DOI:

Article DOI: 10.21474/IJAR01/5319      
DOI URL: http://dx.doi.org/10.21474/IJAR01/5319

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