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Do Traditional Accounting and Economic Value Added Mediate The Relationship Between Corporate Governance and Firm Value of Indonesian State-Owned Enterprises ?

Author

Listed:
  • Taufik Taufik

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,)

  • Tertiarto Wahyudi

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,)

  • Agung Putra Raneo

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia)

  • Mu'izzuddin Mu'izzuddin

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia,)

  • Mohamad Adam

    (Faculty of Economics, Sriwijaya University, South Sumatera, Indonesia.)

Abstract

The purpose of this research was to know whether traditional accounting i.e. return on asset and economic value added mediated the relationship between corporate governance and firm value of Indonesian state-owned enterprises at Indonesian stock exchange from 2012 - 2016. The population of this research was 19 of Indonesian state-owned enterprises during 2012-2016. Based on the census of sampling method applied, 19 firms were selected as sample. Path Analysis was conducted to shows its direct and indirect effects of each path. The result showed that both traditional accounting i.e. return on asset and economic value added did not mediate the relationship between corporate governance and firm value of Indonesian state-owned enterprises at Indonesian stock exchange during 2012-2016. In other words, corporate governance did not effect indirectly on firm value through both traditional accounting i.e. return on asset and economic value added. Another interesting finding was that although economic value added was not as a mediation but it influenced firm value while traditional accounting i.e. return on asset had no effect on firm value.

Suggested Citation

  • Taufik Taufik & Tertiarto Wahyudi & Agung Putra Raneo & Mu'izzuddin Mu'izzuddin & Mohamad Adam, 2018. "Do Traditional Accounting and Economic Value Added Mediate The Relationship Between Corporate Governance and Firm Value of Indonesian State-Owned Enterprises ?," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 118-126.
    • Handle: RePEc:eco:journ1:2018-03-15
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    2. Mehmet Biçer & Ahmet Şit, 2023. "The Impact of Corporate Governance Quality on Firm Value: A Case Study on Corporate Governance Index of Borsa Istanbul," Central European Business Review, Prague University of Economics and Business, vol. 2023(3), pages 1-19.

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    More about this item

    Keywords

    Corporate governance; Traditional accounting; Economic value added; Indonesian state-owned enterprises; Indonesian Stock Exchange.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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