The effect of good corporate governance implementation in diversification strategy of family company and its effect on firm value

Purpose: This study aims to analyze the relation of GCG implementation and diversification strategy in the family company and its effect on the corporate value that is proxied with returns of corporate share (cumulative abnormal return-CAR). Methodology: This study used control variables which were...

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Main Authors: Ali, M.M (Author), Farichah, F. (Author), Kusumaningrum, N.D (Author), Mirfazli, E. (Author), Nurdiono, N. (Author), Wibowo, B. (Author)
Format: Article
Language:English
Published: Gyandhara International Academic Publications 2019
Subjects:
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LEADER 02664nam a2200265Ia 4500
001 10.18510-hssr.2019.76103
008 220121s2019 CNT 000 0 und d
020 |a 23956518 (ISSN) 
245 1 0 |a The effect of good corporate governance implementation in diversification strategy of family company and its effect on firm value 
260 0 |b Gyandhara International Academic Publications  |c 2019 
650 0 4 |a Corporate value 
650 0 4 |a Cumulative Abnormal Return 
650 0 4 |a Diversification Strategy 
650 0 4 |a Good Corporate Government 
650 0 4 |a Leverage 
856 |z View Fulltext in Publisher  |u https://doi.org/10.18510/hssr.2019.76103 
856 |z View in Scopus  |u https://www.scopus.com/inward/record.uri?eid=2-s2.0-85077466303&doi=10.18510%2fhssr.2019.76103&partnerID=40&md5=791415fb8fc7559e0d215900f043ac33 
520 3 |a Purpose: This study aims to analyze the relation of GCG implementation and diversification strategy in the family company and its effect on the corporate value that is proxied with returns of corporate share (cumulative abnormal return-CAR). Methodology: This study used control variables which were size, age, and growth of the company. The hypothesis test was done by using multiple regression and an average T-test. The samples of this study were companies listed in Indonesian Stock Exchange that have fulfilled the characteristics of concentrated share ownership by one family. This formulated two-equation models i.e. Dependent variable for equation model I was diversification strategy and for equation model II was corporate value. Results: The result of this study shows that management compensation, independent commissioners, and managerial ownership positively affect, while the number of the audit committee and leverage ratio do not affect diversification strategy. The next testing result was a diversification strategy applied by the family company that positively affects corporate value. Implications: In order to conduct a controlling function, a company must plan the existence of good corporate governance (GCG) that organizes the relation and responsibility between many parties involved in the company, that a number of regulations, policies, and procedures. The implementation of GCG is expected able to guarantee the action of management in line with the interest of shareholders. © Nurdiono et al. 
700 1 0 |a Ali, M.M.  |e author  
700 1 0 |a Farichah, F.  |e author  
700 1 0 |a Kusumaningrum, N.D.  |e author  
700 1 0 |a Mirfazli, E.  |e author  
700 1 0 |a Nurdiono, N.  |e author  
700 1 0 |a Wibowo, B.  |e author  
773 |t Humanities and Social Sciences Reviews  |x 23956518 (ISSN)  |g 7 6, 691-699