Int. J. of Monetary Economics and Finance   »   2015 Vol.8, No.4

 

 

Title: Corporate governance perception index, performance and value of the firm in Indonesia

 

Authors: Zaidirina; Lindrianasari

 

Addresses:
Economics and Business Faculty, Accounting Department, Universitas Lampung, Jl. Sumantri Brodjonegoro No. 1, Bandar Lampung 35134, Indonesia
Economics and Business Faculty, Accounting Department, Universitas Lampung, Jl. Sumantri Brodjonegoro No. 1, Bandar Lampung 35134, Indonesia

 

Abstract: This study aims to analyse the relationship between corporate governance perception index (CGPI), value and firm performance in Indonesia, based on agency and signalling theory. Analysed data are secondary data obtained by purposive sampling method. Multiple regression analysis instruments are used to test the hypothesis that there is any relationship between CGPI on one hand and firm value and performance on the other. CGPI data used in this study is the result of Indonesian Institute for Corporate Governance rating in 2007-2011. Accounting data used is the firm's value and performances (ROE and ROA). The result of this study shows that CGPI, industry type and firm's age affect ROE. CGPI affects ROE negatively while industry type and firm's age affect ROE positively. Unfortunately, CGPI, industry type and firm age do not affect ROA, and the result of Tobin's Q regression analysis shows that both CGPI variable and control variable do not statistically affect firm value.

 

Keywords: corporate governance perception index; CGPI; firm value; return on assets; ROA; return on equity; ROE; firm performance; Indonesia; agency theory; signalling theory; industry type; firm age.

 

DOI: 10.1504/IJMEF.2015.073230

 

Int. J. of Monetary Economics and Finance, 2015 Vol.8, No.4, pp.385 - 397

 

Available online: 27 Nov 2015

 

 

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