The Influence Of Corporate Governance Practices On The Company’S Financial Performance
AbstractThe aim of this study is to examine the effect of corporate governance practices on company's financial performance. Corporate governance practices are measured by score of corporate governance perception index (CGPI) issued by the Indonesian Institute of Corporate Governance (IICG). Financial performances in this study include operational performance and the performance of company stock. Operational performance is measured by current ratio (CR), debt to asset (DAR), return on asstes (ROA), net profit margin (NPM), return on equty (ROE). Stock performance is measured by price to book value (PBV). Statistical model used is the regression model. Study sample size was forty-three firms (43 firms), which are all included in the application of corporate governance ranking by IICG in 2007-2009, and are listed on the Indonesia Stock Exchange. The data is taken from the CGPI report and financial statements for the year 2007-2009. The results of this study indicate that the practice of corporate governance has a positive effect on company's operational performance by proxy CR, ROA, ROE and also a positive influence on stock performance by proxy PBV
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Global Research Agency in its journal Journal of Global Business and Economics.
Volume (Year): 5 (2012)
Issue (Month): 1 (July)
Contact details of provider:
Web page: http://www.globalresearch.com.my/journal.htm
corporate governance practices; financial performance;
Find related papers by JEL classification:
- M0 - Business Administration and Business Economics; Marketing; Accounting - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Dimitropoulos, Panagiotis E. & Asteriou, Dimitrios, 2010. "The effect of board composition on the informativeness and quality of annual earnings: Empirical evidence from Greece," Research in International Business and Finance, Elsevier, vol. 24(2), pages 190-205, June.
- Siregar, Sylvia Veronica & Utama, Sidharta, 2008. "Type of earnings management and the effect of ownership structure, firm size, and corporate-governance practices: Evidence from Indonesia," The International Journal of Accounting, Elsevier, vol. 43(1), pages 1-27, March.
- Klock, Mark S. & Mansi, Sattar A. & Maxwell, William F., 2005. "Does Corporate Governance Matter to Bondholders?," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 40(04), pages 693-719, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (editor).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.