scholarly journals The Effect of Related Party Transactions on the Performance of Indonesian Listed Companies

2021 ◽  
Vol 20 (1) ◽  
pp. 21-39
Author(s):  
Brigitta Angelica ◽  
◽  
Desya Gunawan ◽  
Jessy Christella ◽  
Yane Chandera ◽  
...  
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Empirical Studies ◽  
Negative Relationship ◽  
Company Performance ◽  
Minority Shareholders ◽  
Related Party Transactions ◽  
Direct Light ◽  
Panel Data Regression ◽  
The Impact

Abstract. The purpose of this paper is to analyze the impact of related party transactions (RPTs) on company performance using a panel data regression on 388 non-financial companies listed in Indonesia Stock Exchange during the 2015-2018 period. RPT variables used in this study are divided into several categories, namely transactions with related parties in the operational field (operational RPTs), financial field (financial RPTs), other fields (other RPTs), and total RPTs (sum of the three previous types). The study finds a significant negative relationship between financial RPTs and other RPTs on company performance. This finding is consistent with the precedent research that non-operational RPTs (i.e., financial RPTs and other RPTs) are commonly used by controlling shareholders as tunneling channels to expropriate minority shareholders. The results suggest policymakers to monitor more closely RPTs, particularly financial and other RPTs, that are more likely to be used as tunneling activities that are detrimental to firm performance. The results of this study are robust to various proxies of firm performance, providing additional empirical studies on RPTs in emerging countries with concentrated ownership structure, and shedding direct light on which type of RPTs that is mainly used as tunneling channel. Keywords: Efficient transaction hypothesis, firm performance, Indonesia, related party transactions, type II agency problem

scholarly journals Konsentrasi Kepemilikan, Transaksi Pihak Berelasi, dan Kinerja Perusahaan

2019 ◽  
Vol 29 (2) ◽  
pp. 592
Author(s):  
Nitami Galih Pangesti ◽  
Widi Hidayat
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Manufacturing Companies ◽  
Minority Shareholders ◽  
Governance System ◽  
Related Party Transactions ◽  
Analysis Technique ◽  
Quantitative Descriptive ◽  
Positive Effect

Agency theory describe that ownership concentration is a good corporate governance system that helps to reduce agency problems arising from the divergence of interest between shareholders and managers. But, when ownership concentration becomes high, lead to another agency problem that is conflict between controlling shareholders and minority shareholders. This study purposed to examine the relation of ownership concentration and related party transactions on firm performance. This research uses quantitative descriptive method with associative approach. Sample used in this study was 474 manufacturing companies listed on the Indonesia Stock Exchange in 2014-2018. We used multiple linear regression as analysis technique. Results showed that ownership concentration had a positive effect on firm performance and related party transactions had a positive effect on firm performance. Keywords : Ownership Concentration; Related Party Transactions; Firm Performance.

scholarly journals Evaluating the Impact of Corporate Governance on Firm Performance Using Board Index

2016 ◽  
Author(s):  
Basil Okoth ◽  
Metin Coşkun
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Positive Relationship ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Vital Role ◽  
Outside Directors ◽  
General Business ◽  
The Impact

In 2013, the CMA at the İstanbul Stock Exchange increased the weight assigned to the Board of Directors component of its Corporate Governance Index to 35% from the previous 25%. Interpreting this as a recognition of the increasing vital role of the board, this study seeks to enhance the work of Abdıoğlu and Kılıç (2015) by putting more focus on the role of women in the boards and the effect of the busy chairman as well as the presence of outside directors on the effectivity of the Board. (The general business structure is associated with family owned groups and holdings which results into a network of intertwined board membership and cases of multiple directorship where, one board chairman can hold the same position or any directorship in as many as ten firmshence the busy chairman). I employ a different method of evaluating performance (EVA) together with the accounting measures of ROE and ROA (as opposed to the overused Tobin’s Q), which I regress against the Board Index to be created. The focus is on firms on the BIST 100 index (excluding financial) between 2009 and 2013. The results reveal that the BINDEX has a significant and positive relationship with firm performance as measured by EVA. A second model reveals no relationship between the BINDEX and firm ROA, similar to the results of Kiliç and Abdioğlu (2015). ROA however has a positive relationship with the proportion of female directors in the board, as earlier reported by LückerathRovers (2013). Another model using ROE as the proxy for performance registers a significant negative relationship with the index. The contradiction obtained in the results from these three models underscore the importance choosing the right methods when estimating the performance of a firm.

scholarly journals Effect of Ownership Structure on Company Performance: Evidence from Emerging Market

2020 ◽  
Vol 1 (1) ◽  
pp. 27-36
Author(s):  
Waleed Alahdal ◽  
Mohammed H. Alsamhi ◽  
Mohammed S. Barakat
Keyword(s):  
Ownership Structure ◽  
Stock Exchange ◽  
Emerging Market ◽  
Empirical Studies ◽  
Listed Companies ◽  
Research Area ◽  
Company Performance ◽  
The Board Of Directors ◽  
Structure Index ◽  
The Impact

This paper uses panel data to examine the impact of ownership structure index on the financial performance of 73 listed companies of the Indian national stock exchange from 2009 to 2016. To measure the Panel Regression in this study, the FEM model was used. The different dimensions of the ownership structure index involve ten items used as the Independent variable of this study. Two measures have been adopted to estimate the firm performance that is; ROA and ROE. In contrast, the control variables are firm size and leverage. This study's empirical evidence shows that the ownership structure index has significant impact on a firm's performance measured by ROA and ROE of Indian Nifty 100 listed companies. Findings of this study support previous empirical studies performed and add some value in the research area of finance that explores different aspects of the board of directors' index and ownership structure index in Indian market by using Nifty 100 as an example.

scholarly journals Risk Management Committee Attributes and Firm Performance

2015 ◽  
Vol 2 (2) ◽  
pp. 1 ◽  
Author(s):  
Basiru Salisu Kallamu
Keyword(s):  
Risk Management ◽  
Firm Performance ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Market Valuation ◽  
Independent Directors ◽  
Management Committee ◽  
Significant Negative Relationship ◽  
The Impact ◽  
Risk Management Committee

We investigate the impact of risk management committee attributes on firm performance for a sample of 37 finance companies listed on the Malaysian stock exchange covering period from 2007 financial year to 2011. The result indicates that a committee composed of majority independent directors positively enhances firm market valuation and negatively affects accounting returns. Independent committee chair was found to positively enhance accounting returns while prior executive experience of directors enhances both accounting returns and market valuation of the companies. Lastly, presence of executive on RMC shows a significant negative relationship with ROA. The result supports agency theory which suggests that independent directors are in a better position to monitor the executive and protect the interest of the various stakeholders. In addition, the result suggests that regulatory agencies should consider recommending finance companies to have directors with prior executive experience to serve on risk management committee.

Debt policy and firm performance of family firms: the impact of economic adversity

2017 ◽  
Vol 13 (3) ◽  
pp. 267-286 ◽  
Author(s):  
Elisabete Simões Vieira
Keyword(s):  
Firm Performance ◽  
Family Firms ◽  
Negative Relationship ◽  
Small Sample ◽  
Minority Shareholders ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship ◽  
Debt Policy

Purpose The purpose of this paper is to analyse the relationship between debt policy and performance among family firms (FF), providing evidence on whether FF differ from non-family firms (NFF). It also focusses on the possibility of asymmetrical debt policy impact on performance between periods of stability and economic adversity. Design/methodology/approach The paper employs panel data regression, considering a sample of Portuguese listed firms for the period between 1999 and 2014. Findings Overall, the author find evidence that debt contributes negatively to firms’ performance, which is consistent with the pecking order prediction, and that the relationship between debt and performance do not differ significantly between FF and NFF. After addressing the endogeneity issue, the author conclude that firms’ performance is negatively influenced by both short- and long-term debt. Considering the total debt, the negative relationship between the two variables differs from family and non-family companies. The results show that age and size influences positively, and the independence of the board directors influences negatively the firms’ performance. The empirical findings suggest that under economic adversity, the firms’ performance is negatively affected. Finally, the author conclude that return on assets appear to fit better than return on equity or MB when you want to relate debt and firm performance. Research limitations/implications A limitation of this study is the small size of the Euronext Lisbon that results in a small sample. Originality/value This paper offers some insights on the relationship between debt policy and firm performance from a country with weak protection of minority shareholders, concentrated ownership and a significant family control. It also gives the opportunity to analyse whether firm performance differs according to market conditions.

Dampak Kebijakan Moneter Pada Output Di Negara-Negara ASEAN Tahun 1980-2014

2017 ◽  
Vol 4 (1) ◽  
pp. 58-70
Author(s):  
Nur Widiastuti
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Fixed Effects ◽  
Empirical Studies ◽  
Negative Relationship ◽  
Least Square ◽  
Fixed Effects Model ◽  
State Data ◽  
Ordinary Least Square ◽  
The Impact

The Impact of monetary Policy on Ouput is an ambiguous. The results of previous empirical studies indicate that the impact can be a positive or negative relationship. The purpose of this study is to investigate the impact of monetary policy on Output more detail. The variables to estimatate monetery poicy are used state and board interest rate andrate. This research is conducted by Ordinary Least Square or Instrumental Variabel, method for 5 countries ASEAN. The state data are estimated for the period of 1980 – 2014. Based on the results, it can be concluded that the impact of monetary policy on Output shown are varied.Keyword: Monetary Policy, Output, Panel Data, Fixed Effects Model

scholarly journals Two Sides of the Same Coin. University-Industry Collaboration and Open Innovation as Enhancers of Firm Performance

2021 ◽  
Vol 13 (7) ◽  
pp. 3866
Author(s):  
Joana Costa ◽  
Ana Rita Neves ◽  
João Reis
Keyword(s):  
Firm Performance ◽  
Open Innovation ◽  
Primary Data ◽  
Company Performance ◽  
Innovation Ecosystem ◽  
Industry Collaboration ◽  
And Performance ◽  
Performance Results ◽  
The Impact ◽  
University Industry

Open innovation is proved to be determinant in the rationalization of sustainable innovation ecosystems. Firms, universities, governments, user communities and the overall environment are called to contribute to this dynamic process. This study aims to contribute to a better understanding of the impact of open innovation on firms’ performance and to empirically assess whether university-industry collaborations are complementary or substitutes for this activity. Primary data were collected from a survey encompassing 908 firms, and then combined with performance indicators from SABI (Spanish and Portuguese business information). Econometric estimations were run to evaluate the role of open innovation and university-industry collaboration in the firm innovative propensity and performance. Results highlight the importance of diversity in collaborations with the academia and inbound open innovation strategy as enhancers of firm performance. The two activities reinforce each other. By testing the impact of open innovation practices on company performance, the need for heterogeneity in terms of contact type and university is also demonstrated. Findings cast light on the need to reformulate existing policy packages, reinforcing the ties with academia as well as the promotion of open innovation strategies. The connection to the innovation ecosystem needs to be further encouraged as well as the promotion of persistent connections with the knowledge sources in an open and multilateral framework.

scholarly journals The impact of Working Capital Management on shareholders’ wealth and profitability: evidence from Colombo Stock Exchange

2018 ◽  
Vol 15 (2) ◽  
pp. 104-115
Author(s):  
Wasantha Perera ◽  
Pradeep Priyashantha
Keyword(s):  
Firm Size ◽  
Regression Models ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Least Square ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Holding Period ◽  
The Impact

The Working Capital Management (WCM) has an important role for the firm’s success or failure, because it directly affects the overall business health of the firm. This study examined the impact of WCM on profitability and shareholders’ wealth using 50 companies listed in different sectors on the Colombo Stock Exchange (CSE) for the period from 2010 to 2015. This sample represents 47% of the selected sectors of CSE. The profitability of the company is measured using gross operating profit (GOP) and shareholders wealth measured by Tobin’s Q (TQ) ratio. The WCM is measured using five independent variables namely stock holding period (SHP), debtors’ collection period (DCP), creditors’ settlement period (CSP), cash conversion circle (CCC) and current assets ratio (CAR). Further, three additional variables such as firm size (SIZE), leverage (LEV) and earning yield (EY) are employed as controlling variables to capture the impact of other performance of the companies.The data were analyzed using ordinary least square (OLS) and panel data regression models. These regression models reveal that there is a significant negative relationship between CCC and dependent variables (GOP & TQ). Further, this relationship has been confirmed by the major components of CCC such as SHP, DCP. Firm size also positively and significantly effects on the firm GOP while negatively effects on the TQ. Further, they revealed that there is a significant positive relationship between LEV and TQ. The study finds that the shareholders’ wealth and profitability can be increased through the efficiency of WCM.

scholarly journals Determinats Of The Amount Of Related Party Transaction: Tax Expense And Institutional Ownership

2020 ◽  
Vol 10 (3) ◽  
Author(s):  
Lia Rahmawati Soraya ◽  
Nurul Aisyah Rachmawati
Keyword(s):  
Stock Exchange ◽  
Institutional Ownership ◽  
Total Sample ◽  
Manufacturing Companies ◽  
Institutional Variables ◽  
Related Party Transactions ◽  
Panel Data Regression ◽  
Data Regression ◽  
Transaction Tax ◽  
Tax Expense

This research is testing whether tax expense and institutional ownership have an influence on the amount of Related Party Transactions (RPT) both related to sales and expense (RPTSE). The population in this research is manufacturing companies listed on the Indonesia Stock Exchange with a total sample of 174 out of 58 manufacturing companies with research period in 2016-2018. By using panel data regression analysis, the results showed indicate that the tax expense of the previous year has a significant positive effect on the amount of related party transactions related to sales and expenses (RPTSE). This shows that the tax expense can encourage companies to conduct related party transactions in the following year. Meanwhile, institutional variables do not have a significant effect on related party transactions related to sales and expense (RPTSE).Practically, related party transactions are relatively complex, so that institutional ownership does not guarantee tomonitor of these transactions.

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