Ownership Structure and Company's Risk Taking Behaviour

Langit, Sekar; Adhariani, Desi

doi:10.2991/icbmr-17.2017.5

Cited by 5 publications

(12 citation statements)

References 27 publications

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“…Meanwhile, Kurniawati & Komalasari (2014) document that foreign investors in Indonesia are more willing to take higher risks to generate higher profits. In contrast, Langit & Adhariani (2017) observe that family ownership and foreign investors can minimize Indonesian firms' risk-taking levels.…”

Section: Introductionmentioning

confidence: 85%

“…Foreign shareholders are arguably more willing to take risky investments because they expect such investments to generate higher returns. However, they also have better investment skills, knowledge, and technology than domestic shareholders that they improve firms' efficiency (Estrin et al, 2009;Langit & Adhariani, 2017). Additionally, foreign shareholders also effectively motivate managers to run firms more efficiently, including making investment decisions (Langit & Adhariani, 2017).…”

Section: Foreign Ownership Structurementioning

confidence: 99%

“…However, they also have better investment skills, knowledge, and technology than domestic shareholders that they improve firms' efficiency (Estrin et al, 2009;Langit & Adhariani, 2017). Additionally, foreign shareholders also effectively motivate managers to run firms more efficiently, including making investment decisions (Langit & Adhariani, 2017). Foreign shareholders with significant ownership (blockholders) have greater power to influence firms' risk-taking process that affect firms' ability to compete against competitors and ensure their business continuity (Chun & Lee, 2017).…”

Section: Foreign Ownership Structurementioning

confidence: 99%

“…Prior studies on firms' risk-taking behavior demonstrate inconsistent results. Most of them analyze the relationship between firms' ownership structure, such as family ownership, foreign ownership, institutional ownership, managerial ownership, and state ownership, on the level of firms' risk-taking behavior (Al-Tamimi, 2013; Barry et al, 2011;Boubakri et al, 2013;Chun & Lee, 2017;Firdaus & Adhariani, 2017;Ho et al, 2020;Kurniawati & Komalasari, 2016;Langit & Adhariani, 2017;Lee et al, 2018;Mahdavi et al, 2012;Nazir et al, 2018;Nguyen, 2012;Paligorova, 2010;Vo, 2016) For instance, Vietnamese state-owned enterprises (SOEs) increase their risktaking activities for managers' personal gains during the recession and pandemic, and greater foreign ownership mitigates the effect. In this regard, foreign owners focus on firms' long-term viability to avoid excessive risks (Ho et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Does foreign ownership structure increase Indonesian firms’ risk-taking?

Subastian

Setiawan

2022

jeb

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This research seeks to investigate the effect of foreign ownership structure on the level of listed Indonesian manufacturing firms’ risk-taking behavior. We predict that foreign owners prefer high-risk investment projects because they aim for short-term profits, and we use earnings volatility as the proxy of risk-taking behavior. This study uses unbalanced panel data from listed Indonesian manufacturing firms from 2014- 2017, resulting in 438 firm-year observations. The research results show that foreign ownership structure has a significantly positive impact on firms’ risk-taking behavior. Furthermore, the robustness test indicates that only firms with 80-90 percent of foreign ownership exhibit a significantly positive effect of foreign ownership on firms’ risk-taking behavior. Thus, foreign shareholders can affect firms’ risk-taking behavior more effectively when they have (almost) full control.

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Section: Introductionmentioning

confidence: 85%

Section: Foreign Ownership Structurementioning

confidence: 99%

Section: Foreign Ownership Structurementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Does foreign ownership structure increase Indonesian firms’ risk-taking?

Subastian

Setiawan

2022

jeb

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“…Furthermore, the other reason that the researcher used manufacturing companies was that in a developing country with an emerging market like Indonesia, the manufacturing company is very important and also can give a high contribution to the economics of the country. The manufacturing company has significantly promoted industrial development in Indonesia and also give a high contribution to the national GDP from 1970 to the present day (Langit & Adhariani, 2018).…”

Section: Introductionmentioning

confidence: 99%

Corporate risk-taking behaviour: Corporate governance perspective

Dewanta

Arifin

2020

JCA

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This study examines the effect of corporate governance which represented by the board of directors, audit committee, managerial compensations, and ownership concentration toward corporate risktaking behaviour in Indonesian manufacturing companies during the period of 2013-2017. Samples were collected using a purposive sampling method with a total of 69 companies, thus there were 345 observations over 5 years. Regression analysis shows that managerial compensations and ownership concentration positively affect corporate risk-taking. The members of the board of directors negatively affect corporate risktaking. Meanwhile, the size of the audit committee does not significantly influence the company's risk-taking behaviour in manufacturing companies listed on the Indonesia Stock Exchange.

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Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

Wulansari

Adhariani

2023

Bus Strat Dev

Self Cite

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The role of corporations in waste management can reflect the superior performance in innovation and the risk a company is willing to take to engage in the circular economy. The superior performance of corporate waste management can be reflected in the corporate disclosure as a media of accountability and transparency. This research investigates the association between waste disclosure and corporate risk-taking and the moderating role of foreign ownership in companies in Indonesia as an emerging country struggling to find an effective solution toward environmental problems, including waste. The observation was performed on non-financial companies listed on the Indonesian Stock Exchange for the period 2018-2021. Panel regression was used to find the answers to the research questions of the direct and moderate associations among corporate waste disclosure, risk-taking and foreign ownership. The results show that waste disclosure encourages increased corporate risk-taking, which means that companies that disclose waste are companies with good accountability and environmental performance and tend to take risks that can increase value. Foreign ownership was not found to statistically strengthen the relationship between waste disclosure and corporate risk-taking, which is different from the expectation that improving the transparency of waste information can attract a greater inflow of foreign investor resources. This brings implication that investors need to increase attention to the issue of corporate waste management and put pressure on companies to provide information on corporate waste performance for investment decision-making. Furthermore, the results of the study also found that waste disclosure in Indonesia is still low compared to the international disclosure standard. This research contributes to the sustainability accounting literature in developing countries by outlining the role of waste disclosure.

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Ownership Structure and Company's Risk Taking Behaviour

Cited by 5 publications

References 27 publications

Does foreign ownership structure increase Indonesian firms’ risk-taking?

Does foreign ownership structure increase Indonesian firms’ risk-taking?

Corporate risk-taking behaviour: Corporate governance perspective

Corporate waste disclosure, risk‐taking and foreign ownership: Evidence from Indonesia

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