Managerial Ownership, Leverage, Profitability, Corporate Value: An Interactive Effect In Indonesia Stock Exchange

Agoestina Mappadang

Abstract


Managerial ownership, firm value and financial characteristic have long been critical issue with regards to company’s financial decision making. If the profitability higher and more assignable profit there and it is the higher value of the firm.  Purpose of this study to analyze how the impact of Managerial Ownership, Leverage, Profitability on the firm value. The population take from companies listed in Indonesian Stock Exchange 2015 - 2019. The population taking from property, real estate and building construction.  This research method using for this study is a purposive sampling with multiple of regression analysis. The result of this research are managerial ownership affects the value of the firm, leverage does not affect the value of the firm and profitability affects on value of the firm. The simultaneous of managerial ownership, leverage and profitability have no significant on  firm value. This study’s Implication will support for stakeholder theory that management as an agent must develop a relationship with stakeholders by embarking on environmental friendly practice to maintain a positive value. Besides, value of the company has created must be prioritized to help the companies enhance their competitive advantage to strengthen on financial performance.

Keywords


Managerial Ownership, Leverage, Profitability, Value of the Firm

Full Text:

PDF

References


Ajaz, Taufeeq, et al. (2017). Stock prices, exchange rate and interest rate: evidence beyond symmetry. Journal of Financial Economic Policy. https://doi.org/10.1108/JFEP-01-2016-0007

Al Faraoque Tony van Zijl, et al. (2005). A Simultaneous equations approach to analysing the relationship between owneship structure & performance in Bangladesh.

AnasAl & Laham. (2013). The effect of financial & systematic risk on stock returns in the Amman stock exchange. Finance & Accounting, 4(6).

Andre, O., & Salma, T. (2014). Pengaruh Profitabilitas , Likuiditas , dan Leverage Dalam Memprediksi Financial Distress (Studi Empiris Pada Perusahaan Aneka Industri yang Terdaftar di BEI Tahun 2006-2010). Jurnal WRA.

Andries et al. (2014). Analyzing time-frequency relationship between interest rate, stock price and exchange rate through continuous wavelet. Economic Modelling. https://doi.org/10.1016/j.econmod.2014.05.013

Anuchitworawong, C. (2004). Ownership-based Incentives, Internal Corporate Risk and Firm Performance. Retrieved from http://hdl.handle.net/10086/13931

Ararat, M., Black, B. S., & Yurtoglu, B. B. (2017). The effect of corporate governance on firm value and profitability: Time-series evidence from Turkey. Emerging Markets Review, 30, 113–132. https://doi.org/10.1016/j.ememar.2016.10.001

Arthur J Keown. (2012). Financial Management : Principles and Application. In Reyes & Lamberton (Eds.), Pearson Australia Group Pty Ltd (6th ed.). Australia: Pearson Education, Prentice Hall.

Awomuse et al. (2012). The Relationship between Nominal Interest Rates and Inflation: New Evidence and Implication for Nigeria. Asia Pacific Financial Studies, 3(9), 158–164.

Bartram, S. M., Brown, G. W., & Conrad, J. (2011). The effects of derivatives on firm risk and value. Journal of Financial and Quantitative Analysis, 46(4), 967–999. https://doi.org/10.1017/S0022109011000275

Brealey, R. A., Myers, S. C., & Allen, F. (2008). Brealey, Myers, and Allen on Real Options. Journal of Applied Corporate Finance. https://doi.org/10.1111/j.1745-6622.2008.00204.x

Brigham, E. F., & Houston, J. F. (2013). Dasar-Dasar Manajemen Keuangan. Salemba Empat. https://doi.org/10.1145/2505515.2507827

Chiou, C. C., & Su, R. K. (2007). On the relation of systematic risk and accounting variables. Managerial Finance. https://doi.org/10.1108/03074350710760278

Cho, C. H., Freedman, M., & Patten, D. M. (2012). Corporate disclosure of environmental capital expenditures: A test of alternative theories. Accounting, Auditing and Accountability Journal. https://doi.org/10.1108/09513571211209617

Claude, & Campbell. (1996). Political Risk, Economic Risk, and Financial Risk. Financial Analyst Journal, Vol. 52(6), 29–46.

Coles, J. L., Daniel, N. D., & Naveen, L. (2008). Boards: Does one size fit all? Journal of Financial Economics, 87, 329–356. https://doi.org/10.1016/j.jfineco.2006.08.008

Coles J.L, D. et al. (2004). Managerial Incentives and Risk Taking. In Finance & Accounting, George state university.

Dedi riyatno. (2007). Pengaruh suku bunga Sertifikat Bank Indonesia dan Nilai kurs terhadap risiko sistematis di BEI. Keuangan Dan Bisnis, 5(1), 24–40.

Dybvig, P. H., & Warachka, M. (2015). Tobin’ s q does not measure firm performance: Theory, empirics, and alternatives measures. Empirics, and Alternatives.

Ehrhardt, M. C., & Brigham, E. F. (2014). Corporate Finance: A Focused Approach. In The effects of brief mindfulness intervention on acute pain experience: An examination of individual difference. https://doi.org/10.1017/CBO9781107415324.004

García-Sánchez, I. M. (2010). The effectiveness of corporate governance: Board structure and business technical efficiency in Spain. Central European Journal of Operations Research, 18, 311–339. https://doi.org/10.1007/s10100-009-0112-4

Goh, C. F., Ali, M. B., & Rasli, A. (2014). The use of partial least squares path modeling in causal inference for archival financial accounting research. Jurnal Teknologi (Sciences and Engineering). https://doi.org/10.11113/jt.v68.2930

Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: Evidence from the field. Journal of Financial Economics. https://doi.org/10.1016/S0304-405X(01)00044-7

Gupta, P., & Kennedy, D. (2009). Corporate Governance and Firm Value : Evidence From Canadian Capital Market. Corporate Ownership and Control, 6(3), 293–307.

Hair et al. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice. https://doi.org/10.2753/MTP1069-6679190202

Hartono, Jogiyanto, & Sulistiawan, D. (2014). The market quality to technical analysis performance: Intercountry analysis. Gadjah Mada International Journal of Business. https://doi.org/10.22146/gamaijb.5658

Hellman Niclas. (2005). Can we expect institutional investors to improve corporate governance? Scandinavian Journal of Management, 21(3), 293–327. https://doi.org/https://doi.org/10.1016/j.scaman.2004.06.005

Hermeindito, C., & Tandelilin, E. (2013). Control Mechanism and Value of Firm: Empirical Evidence from Indonesia Capital Market. International Research Journal of Business Studies. https://doi.org/10.21632/irjbs.6.1.45-62

Houmes R, Mac, A., & Stranaha, H. (2018). The Operating Leverage Impact on Sytematic Risk within of Choice : an Anlaysis of the US Trucking Industry. Managerial Finance, 38(12), 1184–1202.

Jensen and Meckling. (1976). Theory of the Firm, managerial behavior, agency cost and ownership structure. Financial Economic, 3(4), 305–360.

Jiang, C., Chen, H., & Huang, Y. (2006). Capital expenditures and corporate earnings. Managerial Finance. https://doi.org/10.1108/03074350610703812

Jiao, Y. (2010). Stakeholder welfare and firm value. Journal of Banking and Finance, 34(10), 2549–2561. https://doi.org/10.1016/j.jbankfin.2010.04.013

Kasman., & et al. (2011). The impact of interest rate and exchange rate volatility on banks’ stock returns and volatility: Evidence from Turkey. Economic Modelling. https://doi.org/10.1016/j.econmod.2011.01.015

Kim, S. H., & Lee, K. H. (2014). Pricing of liquidity risks: Evidence from multiple liquidity measures. Journal of Empirical Finance. https://doi.org/10.1016/j.jempfin.2013.11.008

Lee, C. H., & Hooy, C. W. (2012). Determinants of systematic financial risk exposures of airlines in North America, Europe and Asia. Journal of Air Transport Management, 24, 31–35. https://doi.org/10.1016/j.jairtraman.2012.06.003

Lew, S. H. (2015). Investment Expenditures and Firm Value. The Korean Academic Association of Business Administration. https://doi.org/10.18032/kaaba.2016.29.1.021

Lin, X., Wang, C., & et al. (2018). Investment, Tobin’s q, and Interest Rates. Journal of Financial Economics, 130(3), 620–640. https://doi.org/10.1016/j.jfineco.2017.05.013

Ling, D. C., & Naranjo, A. (1997). Economic Risk Factors and Commercial Real Estate Returns. Journal of Real Estate Finance and Economics. https://doi.org/10.1023/A:1007754312084

Lustig, H., & Verdelhan, A. (2011). The cross section of foreign currency risk premia and consumption growth risk: Reply. American Economic Review. https://doi.org/10.1257/aer.101.7.3477

Majanga, B. B. (2018). Corporate CAPEX and market capitalization of firms on Malawi stock exchange: an empirical study. Journal of Financial Reporting and Accounting. https://doi.org/10.1108/JFRA-10-2016-0080

Mandelker, G. N., & Rhee, S. G. (1984). The Impact of the Degrees of Operating and Financial Leverage on Systematic Risk of Common Stock. The Journal of Financial and Quantitative Analysis. https://doi.org/10.2307/2331000

Markowitz, H. (1952). Portfolio Selection Harry Markowitz. The Journal of Finance.

Modigliani, F., & Miller, M. H. (1963). Corporate Income Taxes and the Cost of Capital: A Correction. American Economic Review. https://doi.org/10.2307/1809167

Myers, S. et al. (1984). Corporate financing & investment decisions when firms have information that investor. Financial Economic, 13, 187–221.

Norhafiza Nordin. (2014). The impact of commodity prices, interest rate and exchange rate on stock market performance: an empirical analysis from Malaysia. Malaysian Management Journal, 18, 39–52.

Nursakti Niko R, et al. (2017). The Effect of Capital Expenditure and Market Share on Profits per Region in an Indonesian Mobile Telecommunications Company. Advances in Economic, Business and Management Research, 55.

O’Sullivan, D., & McCallig, J. (2012). Customer satisfaction, earnings and firm value. European Journal of Marketing, 46(6), 827–843. https://doi.org/10.1108/03090561211214627

Pan W. (2018). How does the macroeconomy respond to stock market fluctuations? the rule of sentiment. Macroeconomic Dynamics, 1365–1005(18), 1–26. https://doi.org/10.1017/S1365100518000287

Pasternack D, & Rosenberg. (2011). The impact of Stock Option Incentives on Investment and Firm Value. Swedish School of Economics and Business Administration, 476.

Peters, R. H., & Taylor, L. A. (2017). Intangible capital and the investment-q relation. Journal of Financial Economics, 123(2), 251–272. https://doi.org/10.1016/j.jfineco.2016.03.011

Rachmawati, & Laila. (2015). Faktor makroekonomi yang mempengaruhi pergerakan harga saham pada indeks saham Syariah Indonesia (ISSI) di Bursa Efek Indonesia (BEI). Jurnal Ekonomi Syariah Teori Dan Terapan, 2(11).

Rani T, & Khan A. (2017). Financial Variables and Systematic Risk. Chinese Business Review, 16(1), 36–46. https://doi.org/10.17265/1537-1506/2017.01.004

Santosa, P.W., & Puspitasari, N. (2019). Corporate Fundamentals, Bi Rate And Systematic Risk: Evidence From Indonesia Stock Exchange. Jurnal Manajemen, 23(1), 40–53. https://doi.org/10.24912/jm.v23i1.443

Shen, N., & Kevin Au. (2018). Diversification Strategy, Ownership Structure and financial Crisis : Performance of Chinese Private Firms. Asia Pacific Financial Studies, 47, 54–80. https://doi.org/10.1111/ajts.12203

Shin, H.-H., & Stulz, R. M. (1998). Are Internal capital Markets Efficient? The Quarterly Journal of Economics. https://doi.org/10.1162/003355398555676

Sudiyatno, B., Puspitasari, E., & Kartika, A. (2012). The Company’s Policy, Firm Performance, and Firm Value: An Empirical Research on Indonesia Stock Exchange. American International Journal of Contemporary Research.

Sudjono. (2002). Analisis keseimbangan dan hubungan simultan antara variabel ekonomi makro terhadap indeks harga saham di bursa efek jakarta dengan metode VAR (Vector Autoregression) dan ECM (Error Correction Model). Riset Ekonomi Dan Manajemen, 2(3), 81–97.

Syahib, N. (2000). Analisis Pengaruh Beberapa Faktor Fundamental dan Risiko Sistematik Terhadap Harga Saham (Industri Barang Konsumsi yang Go Public di Pasar Modal Indonesia). Jurnal Ekonomi Dan Bisnis Indonesia.

Tandelilin, E. et al. (2007). Corporate governance, risk management, and bank performance: Does type of ownership matter? Eadn Working Paper.

Utami, W. R., Hartoyo, S., Nur, T., & Maulana, A. (2015). The Effect of Internal and External Factors on Stock Return : Empirical Evidence from the Indonesian Construction Subsector. Asian Journal of Business and Management.

Utari, N., & Sari, M. (2016). Pengaruh asimetri informasi, leverage, kepemilikan manajerial dan kepemilikan institusional pada manajemen laba. E-Jurnal Akuntansi.

Vafeas, N., & Vlittis, A. (2019). Board executive committees, board decisions, and firm value. Journal of Corporate Finance, 58, 43–63. https://doi.org/10.1016/j.jcorpfin.2019.04.010

Villalonga B, A. R. (2004). How do family ownership, management and controlaffect firm value? MA 02163(HArvard Business School. The Warton school Univerity of Pennsylvania, PA 19104).

Watts, R. L. (1977). Corporate financial statements, a product of the market and political processes. Australian Journal of Management. https://doi.org/10.1177/031289627700200104

Yu, E. P. yi, Guo, C. Q., & Luu, B. Van. (2018). Environmental, social and governance transparency and firm value. Business Strategy and the Environment, 27(7). https://doi.org/10.1002/bse.2047




DOI: https://doi.org/10.36262/widyakala.v8i2.443

Refbacks

  • There are currently no refbacks.


Copyright (c) 2021 WIDYAKALA: JOURNAL OF PEMBANGUNAN JAYA UNIVERSITY

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.


Redaksi Jurnal Widyakala
Lembaga Penelitian dan Pengabdian Kepada Masyarakat (LP2M)
Universitas Pembangunan Jaya
Jalan Cendrawasih Raya Blok B7/P, Sawah Baru, Ciputat, 15413
Telp : 021-7455555 ext 1311
widyakala.journal@upj.ac.id