Title: Corporate governance, privatisation, and financial performance of Indonesian state-owned enterprises

Authors: Nurharjanto; Tulus Haryono; Djoko Suhardjanto; Niki Lukviarman; Erna Setiany

Addresses: Universitas Sebelas Maret, Jl. Ir. Sutami No. 36A, Surakarta, 57126, Indonesia ' Universitas Sebelas Maret, Jl. Ir. Sutami No. 36A, Surakarta, 57126, Indonesia ' Universitas Sebelas Maret, Jl. Ir. Sutami No. 36A, Surakarta, 57126, Indonesia ' Jl. Universitas Andalas, Limau Manis, Pauh, Padang, 25163, Indonesia ' Universitas Mercu Buana, Jl. Meruya Selatan No. 1, Jakarta, 11650, Indonesia

Abstract: This study aimed to investigate the effect of corporate governance (CG) to state-owned enterprises (SOEs) performance before and after privatisation. The data consisted of primary data obtained through questionnaires, followed by focus group, and secondary data sourced from published annual reports of SOEs. This research gathered 94 observations of firm-year of SOEs listed in Indonesia. Multiple linear regression was employed to analyse the effect of the CG index on the financial performance, and paired sample t-test to test the performance before and after privatisation. The result shows that the CG index has a positive effect on the financial performance of SOEs. Furthermore, SOEs exhibited improved financial performance after privatisation. Accordingly, the government of Indonesia should selectively choose SOEs for privatisation to achieve the optimum results of privatisation in accordance with the priorities imposed by the government as the primary owner.

Keywords: corporate governance; financial performance; privatisation; state owned enterprises.

DOI: 10.1504/IJRM.2018.091858

International Journal of Revenue Management, 2018 Vol.10 No.2, pp.168 - 188

Accepted: 27 Feb 2018
Published online: 18 May 2018 *

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