The Influence of Corporate Governance Index and Related-Party Transactions on Company Value with Political Connections as a Moderation Variable: The Case of State-Owned Companies on the Indonesia Stock Exchange
The Influence of Corporate Governance Index and Related-Party Transactions on Company Value with Political Connections as a Moderation Variable: The Case of State-Owned Companies on the Indonesia Stock Exchange
Author(s): Ima Widha Ratnasari, Gede Adi Yuniarta, Desak Nyoman Sri WERASTUTISubject(s): Economy, Accounting - Business Administration
Published by: Corpul Experților Contabili și Contabililor Autorizați din România (CECCAR)
Keywords: corporate governance; firm value; state-owned enterprises; related-party transactions; political connections;
Summary/Abstract: Corporate governance and company value are essential issues in managing state-owned companies in Indonesia. This research examines the influence of corporate governance index and related-party transactions on the value of state-owned companies on the Indonesia Stock Exchange by analyzing the role of political connections as a moderating variable. The population of this research is all state-owned companies on the Indonesia Stock Exchange from 2015 to 2022. The research sample was obtained using a purposive sampling technique. Data analysis uses moderated regression analysis. This research found that, in the case of state-owned companies in Indonesia, the corporate governance index positively affected company value. In contrast, related-party transactions harmed company value. Political connections have not been proven to be a moderating variable in the influence of corporate governance index on company value. However, they are proven on the influence between related-party transactions and company value. Investors in the Indonesian capital market assess political connections in state-owned companies in Indonesia as increasing the risk that it will worsen the influence of related-party transactions and the value of state-owned companies.
Journal: CECCAR Business Review
- Issue Year: 5/2024
- Issue No: 4
- Page Range: 68-79
- Page Count: 12
- Language: English