The Effect of Ownership Structure on Firm Value with Investment Decision as Intervening Variable (Empirical Study of the Listed Companies in Indonesia Stock Exchange Period 2008-2014)
Keywords:
Managerial Ownership Structure, Institutional Ownership Structure, Investment Decision, and Firm ValueAbstract
This study aimed to examine the effect of ownership structure on firm value with investment decision as an intervening variable. The ownership structure proxied by managerial ownership structure and institutional ownership structure. The investment decision proxied by Market to Book Value of Assets. The firm value proxied by Price to Book Value. Population in this study are all companies listed on the Indonesian Stock Exchange (IDX) in the period 2008-2014. Selection of the sample in this study based on purposive sampling method. Based on these criteria there are 99 companies each year that requirements in the study. This study used multiple linear regression and path analysis. The results showed that managerial ownership and institutional ownership has no effect on investment decision, while the investment decision effect on firm value, managerial ownership has a negative effect on firm value, and institutional ownership has no effect on firm value. The investment decision is not a variable that mediates the relationship between the ownership structures with firm value. These findings reinforce previous research that reveals ownership concentration because there has not been a clear separation between ownership structure with the control of the company companies listed on the Indonesian Stock Exchange (IDX).
Keywords: Managerial Ownership Structure, Institutional Ownership Structure, Investment Decision, and Firm Value
References
Abukosim, Mukhtaruddin, Ferina, dan Nurcahaya. 2014. Ownership Structure and Firm Values: Empirical Study on Indonesia Manufacturing Listed Company. International Refereed Research Journal, Vol.-V, Issue-4, October 2014 [3].
Adam, T. dan Goyal, V. K. 2003. The Investment Opportunity Set and Its Proxy Variables: Theory and Evidence. Working Paper. Hong Kong University of Science and Technology.
Afzal, A. dan Rohman, A. 2012. Influence Investment Decisions, Decisions Funding and Dividend Policy of the Company's value. Diponegoro Journal of Accounting, Vol. 1 No. 2: 09.
Ang, J. S., Cole, R. A., dan Lin, J. W. 2000. Agency Costs and Ownership Structure. The Jounal of Finance Vol. LV, No. 1: 81-106.
Ananta, G. E. F., Suardhika, I. M. S., dan Ratnadi, N. M. D. 2014. Effect of Managerial Ownership, Investment Decisions, Decisions Funding and Dividend Policy on Corporate Value in the Indonesia Stock Exchange. E-Jurnal Ekonomi dan Bisnis Universitas Udayana 3.9: 494-505.
Baber, W. R., Janakiraman, S. N., dan Kang, S. H. 1996. Investment Opportunities and the Structure of Executive Compensation. Journal of Accounting and Economics, Vol. 21, No. 3: 297-318.
Band, D. 1992. Corporate Governance: Why Agency Theory Is Not Enough? European Management Journal, Vol. 10 No. 4: 453-459.
Cho, M. H. 1998. Ownership Structure, Investment, and the Corporate Value: An Empirical Analysis. Journal of Financial Economics, 47: 103-121.
Claessens, S. Djankov, S. dan Lang, L.H.P. 2000. The Separation of Ownership and Control in East Asian Corporations. Journal of Financial Economic, Vol. 58: 81-112.
Claessens, S. dan Fan, J.P.H. 2003. Corporate Governance in Asia: A Survey. Paper. International Review of Finance.
Connell, J. dan Muscarella, C. 1985. Corporate Capital Expenditure Decisions and The Market Value of The Firm. Journal of Financial Economics, Vol. 14: 399-422.
Connelly, B. L., Certo, S. T., Ireland, D., Reutzel, C. R. 2011. Signaling Theory: A Review and Assessment. Journal of Management, Vol. 37: 39-67.
Diyanty, V. 2010. Analysis of Effect of Government Ownership and Financial Decisions on Corporate Performance: A study of the Government Companies Listed on the Stock Exchange. Jurnal Akuntansi, Vol. 10, No. 2: 155-80.
Eisenhardt, K. M. 1989. Agency Theory: An Assessment and Review. The Academy of Management Review, Vol. 14, No. 1: 57-74.
Fama, E. F. 1978. The Effects of a Firm’s Investment and Financing Decisions on The Welfare of Its Security Holders. The American Economic Review, Vol. 68, No. 3: 272-284.
Fenandar, G. I. dan Raharja, S. 2012. Influence Investment Decisions, Decisions Funding and Dividend Policy of the Company Value. Diponegoro Journal of Accounting, Vol. 1, No. 2: 1-10.
Hadiprajitno, P. B. 2013. Ownership Structure, Corporate Governance Mechanisms and Agency Costs in Indonesia (Empirical Study at Company in Indonesia Stock Exchange). Jurnal Akuntansi dan Auditing, Vol. 9, No. 2: 97-127.
Haruman, T. 2008. Effect of Ownership Structure of the Financial Decisions and Firm Value (Survey on Manufacturing Company in Indonesia Stock Exchange). SNA XI Pontianak.
Iturriaga, F. J. L. dan Sanz, J. A. R. 2001. Ownership Structure, Corporate Value and Firm Investment: A Simultaneous Equations Analysis of Spanish Companies. Journal of Management and Governance 5: 179-204.
Iturriaga, F.J.L. dan Sanz, J.A.R. 2012. Ownership Structure, Financial Decisions, and Institutional Setting: An International Analysis through Simultaneous Equations. Economics Research International, Vol. 2012: 12.
Jama’an. 2008. Influence Mechanism of Corporate Governance, and Quality of Public Accounting Firm for the Integrity of Financial Statement Information (Study on Public Company JSX). Thesis. Magister of Accounting Science. Graduate Program, Diponegoro University.
Jensen, M. C. dan Meckling, W. H. 1976. Theory of The Firm: Managerial Behavior Agency Cost and Ownership Structure. Journal of Finance and Economics 3: 305-360.
Jusriani, I.F. 2013. Effect of Profitability Analysis, Dividend Policy, Debt Policy and Managerial Ownership on Firm Value (Empirical Study on Manufacturing Companies Listed in Indonesia Stock Exchange Period 2009-2011). Thesis. Undergraduate Program Business and Economics Faculty, Diponegoro University.
Kallapur, S. dan Trombley, M. A. 2001. The Investment Opportunity Set: Determinants, Consequences, and Measurement. Managerial Finance, Vol. 27, No. 3: 3, Proquest.
Mardiyati, U., Ahmad, G.N., dan Putri, R. 2012. Effect of Dividend Policy, Debt Policy, and Profitability of the Value Manufacturing Companies Listed in Indonesia Stock Exchange (BEI) Period 2005-2010. Jurnal Riset Manajemen Sains Indonesia (JRMSI), Vol. 3, No. 1.
Myers, S.C. 1977. Determinants of Corporate Borrowing. Journal of Financial Economics, Vol. 5: 147-175.
Nuraina, E. 2012. Effect of Institutional Ownership and Firm Size of the Debt Policy and Values Company (Study at Manufacturing Companies Listed on the Stock Exchange). Journal of Business and Economics (JBE), Vol. 19, No. 2: 110-125, ISSN: 1412-3126.
Otoritas Jasa Keuangan. 2014. Corporate Governance Roadmap Indonesia. Jakarta: Otoritas Jasa Keuangan.
Pujiati, D. dan Widanar, E. 2009. Effect of Ownership Structure on Corporate Values: Financial Decisions as an intervening variable. Jurnal Ekonomi dan Bisnis Akuntansi Ventura, Vol. 12, No. 1: 71 – 86.
Rizqia, D. A, Aisjah, S. dan Sumiati. 2013. Effect of Managerial Ownership, Financial Leverage, Profitability, Firm Size, and Investment Opportunity on Dividend Policy and Firm Value. Research Journal of Finance and Accounting, Vol. 4, No. 11: 120-130.
Stulz, R. 1988. Managerial Control of Voting Rights: Financing Policies and the Market for Corporate Control. Journal of Financial Economics, Vol. 20, No. 25: 54.
Villalonga, B. dan Amit, R. 2006. How Do Family Ownership, Control and Management Affect Firm Value? Journal of Financial Economics, Vol. 80: 385-417.
Wahyudi, U. dan Pawestri, H. P. 2006. Implications of Ownership Structure on Firm Value: the Financial Decisions as an intervening variable. SNA IX Padang, 23-26 Agustus 2006.
Wijaya, L. R. P. 2010. Implications Investment Decisions, Decisions Funding and Dividend Policy on Corporate Values. Thesis, Magister of Accounting, Economy Faculty, Universitas Sebelas Maret.
Wibawa, B. A, Wijaya, L. R. P.. 2010. Influence Investment Decisions, Decisions Funding and Dividend Policy of the Company's value. SNA XIII Purwokerto.
