Corporate Governance, State Ownership and Firm Performance: An Empirical Study of State-Owned Enterprises in Indonesia

Abstract

Objective - The purpose of this research is to determine the effect of good corporate governance (GCG) on Indonesia's SOEs and the influence of state ownership on company performance. Methodology/Technique - This study examines State Owned Enterprises in Indonesia that were listed on the Indonesia Stock Exchange between 2011 and 2015. Findings - The empirical results show that GCG and state ownership both have a positive influence on the company's financial performance (in this case, Return On Assets). However, the percentage of state ownership has a negative effect on the relationship between Good Corporate Governance and Return On Assets. Novelty - One agency cost is monitoring expenditure by the principal. Privatization is one way to improve the performance of SOEs. Privatization is believed to improve the performance of SOEs, as a result of increased supervision of the performance of SOEs in Indonesia. Type of Paper: Empirical Keywords: State Owned Enterprises; Good Corporate Governance; State Ownership; Return On Assets; Indonesia. JEL Classification: G32, H70, G34.

State-Owned Enterprises (SOEs): The Role in Economic Development and The Determinant of Its Performance

“…Other than that, we also applied indicators of ownership ( e.g. Eforis C, 2018 ) to assess the effect on SOEs performance. Table 1 shows the variables selected for each category that used in this study.…”

“…In contrast, Eforis (2018) conducted research on SOEs in Indonesia that were listed in the Indonesia Stock Exchange (IDX) between 2011 and 2015 to investigate the relationship between state ownership and firm's performance. The authors showed that state ownership has a positive influence on the company's financial performance.…”

What are the drivers of SMEs' financial performance? The interaction of intellectual capital and ownership

“…Few studies on the benefits of state ownership have supported efficiency arguments for state ownership, (e.g., police and prison ownership; Hart, Shleifer, & Vishny, 1997). By contrast, most studies have demonstrated that state ownership is inherently inefficient (Eforis, 2018;Lin, Ma, & Su, 2009;Martin & Parker, 1995). First, the agent-principal problem is more prominent under state ownership.…”

Pengaruh kepemilikan negara, hubungan politik dan penghindaran pajak terhadap kinerja keuangan di Indonesia

“…Dengan jumlah kompetitor yang akan sangat terbatas diharapkan perusahaan milik negara ini dapat memperoleh laba yang maksimal. Hasil penelitian dari Eforis (2018) dan Zulaikah et al, (2019) menemukan bahwa perusahaan dengan kepemilikan negara mayoritas dapat mencapai kinerja perusahaan yang lebih tinggi karena mendapat dukungan dari pemerintah. Penelitian oleh Liljeblom et al, (2019) dan Chan et al, (2018) menyimpulkan bahwa kepemilikan negara mempunyai pengaruh signifikan negatif terhadap kinerja perusahaan.…”

“…Penelitian ini sejalan dengan penelitian dari Abramov et al, (2017), Wu et al, (2013), Eforis, (2017) yang juga menujukkan bahwa variabel kepemilikan negara berpengaruh tidak signifikan terhadap kinerja keuagan perusahaan yang diukur dengan ROA. Hasil penelitian ini juga sesuai dengan hasil penelitian dari Eforis, (2018), Saragih, (2013, dan Alipour, (2013) yang menyatakan bahwa variabel kepemilikan negara memiliki dampak signifikan positif dengan kinerja perusahaan yang diukur dengan ROE Akan tetapi hasil dari penelitian ini bertolak belakang dengan hasil penelitian dari Liljeblom et al, (2019), Chan et al, (2018), Zulaikah et al, (2019) yang menemukan bahwa kepemilikan negara berpengaruh signifikan negatif terhadap kinerja perusahaan.…”