Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange

This study examines the relationship between corporate governance (CG), family ownership, and corporate performance in firms listed on the Indonesia Stock Exchange (IDX). This research investigates whether CG practices influence both market-based performance (measured by Tobin’s Q) and accounting-ba...

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Published in:Cogent Business and Management
Main Author: Nasir A.; Wan Ismail W.A.; Kamarudin K.A.; Zarefar A.; Armadani
Format: Review
Language:English
Published: Cogent OA 2024
Online Access:https://www.scopus.com/inward/record.uri?eid=2-s2.0-85191533583&doi=10.1080%2f23311975.2024.2339546&partnerID=40&md5=dbe7af89ee99b382842a714f58d876c9
id 2-s2.0-85191533583
spelling 2-s2.0-85191533583
Nasir A.; Wan Ismail W.A.; Kamarudin K.A.; Zarefar A.; Armadani
Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
2024
Cogent Business and Management
11
1
10.1080/23311975.2024.2339546
https://www.scopus.com/inward/record.uri?eid=2-s2.0-85191533583&doi=10.1080%2f23311975.2024.2339546&partnerID=40&md5=dbe7af89ee99b382842a714f58d876c9
This study examines the relationship between corporate governance (CG), family ownership, and corporate performance in firms listed on the Indonesia Stock Exchange (IDX). This research investigates whether CG practices influence both market-based performance (measured by Tobin’s Q) and accounting-based performance (measured by Return on Assets, ROA). We further investigate the moderating role of family ownership in this relationship. Our panel data analysis covers the period from 2014 to 2020, including firms from primary and secondary industries. The findings reveal a significantly positive association between CG implementation and corporate performance, indicating that good CG mechanisms enhance a firm’s market and accounting performance. However, family ownership weakens this relationship with market performance but has no significant impact on accounting performance. Family-controlled firms tend to exhibit weaker corporate governance practices and may undermine investor confidence, potentially leading to lower stock prices. © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
Cogent OA
23311975
English
Review

author Nasir A.; Wan Ismail W.A.; Kamarudin K.A.; Zarefar A.; Armadani
spellingShingle Nasir A.; Wan Ismail W.A.; Kamarudin K.A.; Zarefar A.; Armadani
Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
author_facet Nasir A.; Wan Ismail W.A.; Kamarudin K.A.; Zarefar A.; Armadani
author_sort Nasir A.; Wan Ismail W.A.; Kamarudin K.A.; Zarefar A.; Armadani
title Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
title_short Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
title_full Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
title_fullStr Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
title_full_unstemmed Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
title_sort Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange
publishDate 2024
container_title Cogent Business and Management
container_volume 11
container_issue 1
doi_str_mv 10.1080/23311975.2024.2339546
url https://www.scopus.com/inward/record.uri?eid=2-s2.0-85191533583&doi=10.1080%2f23311975.2024.2339546&partnerID=40&md5=dbe7af89ee99b382842a714f58d876c9
description This study examines the relationship between corporate governance (CG), family ownership, and corporate performance in firms listed on the Indonesia Stock Exchange (IDX). This research investigates whether CG practices influence both market-based performance (measured by Tobin’s Q) and accounting-based performance (measured by Return on Assets, ROA). We further investigate the moderating role of family ownership in this relationship. Our panel data analysis covers the period from 2014 to 2020, including firms from primary and secondary industries. The findings reveal a significantly positive association between CG implementation and corporate performance, indicating that good CG mechanisms enhance a firm’s market and accounting performance. However, family ownership weakens this relationship with market performance but has no significant impact on accounting performance. Family-controlled firms tend to exhibit weaker corporate governance practices and may undermine investor confidence, potentially leading to lower stock prices. © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
publisher Cogent OA
issn 23311975
language English
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