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Unravelling family firms' influence on corporate governance mechanisms for long-term performance

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  • Adi Kurniawan Yusup
  • Muslichah Muslichah
  • Cicilia Erna Susilawati

Abstract

We examine the effect of corporate governance mechanisms of debt, dividend, board size, and board independence on Indonesian companies long-term performance. There are 451 non-financial companies (3,831 firm-year observations) in Indonesia from 2010-2019 used as samples and analysed using panel data analysis techniques. We use family firms as moderating variables. In addition, this study also uses a new measurement of long-term performance by considering the return and risk aspects in its measurement. The result suggests that dividends are a corporate governance mechanism that can improve long-term performance. On the other hand, board size has negative association with long-term performance. Interestingly, family plays a role as a steward in Indonesia's companies. Family firms can strengthen the effect of dividends and board size to increase long-term performance. Various robustness tests were carried out, and the results were consistent with previous tests.

Suggested Citation

  • Adi Kurniawan Yusup & Muslichah Muslichah & Cicilia Erna Susilawati, 2025. "Unravelling family firms' influence on corporate governance mechanisms for long-term performance," Global Business and Economics Review, Inderscience Enterprises Ltd, vol. 33(2), pages 202-224.
    • Handle: RePEc:ids:gbusec:v:33:y:2025:i:2:p:202-224
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