Identifying the Influence of Ownership Structure, Business Diversification and Company Size on Company Value

Masdupi, Erni Identifying the Influence of Ownership Structure, Business Diversification and Company Size on Company Value. .. ISSN .

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Abstract

This study investigates the influnce of ownership structure, business diversification and company size on company value that listed in Indonesia Stock Exchange (IDX) in the periode of 1996-2005. Population of this study is all listed companies in IDX in the periode of analysis. The purposive sampling is used to determine the number of sample. Based on 210 company-year observations, regression was executed, and the analysis found that size significantly contributed to company value which measured by market to book value ratio (MBVR) while one proxy of ownership structure (foreign ownerhip) was found to be significant in influencing company value. Diversification of business did not seem to influence company value. Company size has negative and significant effects on company value. Perhaps, in an emerging market such as Indonesia, managers acted based on their own interest by enlarging company to pursue high salary and other perquisites. Therefore, large company in IDX could not reap benefit of greater economies of scales, better competitive position, having more skilled managers, and having greater access to cheaper sources of funds. It means that listed companies on the IDX could decrease company value by increasing their size. This implies that the investors must control large company effectively.

Item Type: Article
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Fakultas Ekonomi > Manajemen - S1
Depositing User: Mrs. Wiwi Sartika
Date Deposited: 26 Jun 2020 06:33
Last Modified: 26 Jun 2020 06:33
URI: http://repository.unp.ac.id/id/eprint/27402

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