Title: Unravelling family firms' influence on corporate governance mechanisms for long-term performance

Authors: Adi Kurniawan Yusup; Muslichah Muslichah; Cicilia Erna Susilawati

Addresses: School of Business and Management, Ciputra University, Surabaya, Indonesia ' Accounting Department, Malangkucecwara Institute of Economic Science, Malang, Indonesia ' School of Business and Management, Widya Mandala Catholic University, Surabaya, Indonesia

Abstract: We examine the effect of corporate governance mechanisms of debt, dividend, board size, and board independence on Indonesian companies long-term performance. There are 451 non-financial companies (3,831 firm-year observations) in Indonesia from 2010-2019 used as samples and analysed using panel data analysis techniques. We use family firms as moderating variables. In addition, this study also uses a new measurement of long-term performance by considering the return and risk aspects in its measurement. The result suggests that dividends are a corporate governance mechanism that can improve long-term performance. On the other hand, board size has negative association with long-term performance. Interestingly, family plays a role as a steward in Indonesia's companies. Family firms can strengthen the effect of dividends and board size to increase long-term performance. Various robustness tests were carried out, and the results were consistent with previous tests.

Keywords: corporate governance; family firms; long-term performance; LTP; agency theory.

DOI: 10.1504/GBER.2025.147991

Global Business and Economics Review, 2025 Vol.33 No.2, pp.202 - 224

Received: 13 Oct 2023
Accepted: 19 Feb 2024
Published online: 13 Aug 2025 *

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