Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Corporate governance and leverage on firm value: Evidence of Indonesian large firms
Dublin Core
Title
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Corporate governance and leverage on firm value: Evidence of Indonesian large firms
Corporate governance and leverage on firm value: Evidence of Indonesian large firms
Subject
corporate governance; commissioner; audit; ownership; firm age; leverage
Description
This paper aims at the nexus of corporate governance, leverage, and firm value of selected Indonesian large firms in the 2014-2019 period. Specifically, the study is concerned about the effect of independent commissioner board size, institutional ownership, and audit committee size as proxies of corporate governance on firm value. The controlling variables are leverage and firm age. Panel regression analyzed secondary data collected from the LQ45 index at Indonesia Stock Exchange firms as the large firms. The findings show that
institutional ownership positively impacted firm value. However, the independent commissioner and audit committee exerted insignificant influence. The study results further showed that firm age and leverage significantly negatively impact firm value,
respectively. Decisively, findings from this paper reflect that corporate governance positively influences firm value significantly. The study recommended that corporate governance dynamics in firms be empowered and re-examined, especially the audit committee's effectiveness. Both firm age and leverage do not affect productivity and firm
value. The audit committee's role is more than optimal in carrying out the supervisory and control functions of the corporate management so that the responsibility of the management is considered transparent and results in an increase in hareholder trust. It is also recommended that the increase in firm age and excessive leverage be balanced with
the creation of innovation and productivity of large firms.
institutional ownership positively impacted firm value. However, the independent commissioner and audit committee exerted insignificant influence. The study results further showed that firm age and leverage significantly negatively impact firm value,
respectively. Decisively, findings from this paper reflect that corporate governance positively influences firm value significantly. The study recommended that corporate governance dynamics in firms be empowered and re-examined, especially the audit committee's effectiveness. Both firm age and leverage do not affect productivity and firm
value. The audit committee's role is more than optimal in carrying out the supervisory and control functions of the corporate management so that the responsibility of the management is considered transparent and results in an increase in hareholder trust. It is also recommended that the increase in firm age and excessive leverage be balanced with
the creation of innovation and productivity of large firms.
Creator
Perdana Wahyu Santosa, Any Setianingrum, Chandra Yusuf
Source
DOI: 10.26905/jkdp.v26i4.7764
Publisher
Universitas Merdeka Malang
Date
October 2022
Contributor
Sri Wahyuni
Rights
ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Files
Collection
Citation
Perdana Wahyu Santosa, Any Setianingrum, Chandra Yusuf, “Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Corporate governance and leverage on firm value: Evidence of Indonesian large firms,” Repository Horizon University Indonesia, accessed March 13, 2025, https://repository.horizon.ac.id/items/show/4874.
Corporate governance and leverage on firm value: Evidence of Indonesian large firms,” Repository Horizon University Indonesia, accessed March 13, 2025, https://repository.horizon.ac.id/items/show/4874.