The role of independent commissioner in the effect of family ownership on capital structure in family companies in Indonesia
DOI:
https://doi.org/10.14414/tiar.v10i2.1972Keywords:
Capital structure, family ownership, independent commissioner.Abstract
The purpose of this research is to analyze the effect of family ownership on capital structure with independent commissioner as a moderating variable in family companies in Indonesia. The study used the population consisting of family businesses listed on Indonesia Stock Exchange. The data were taken from the Indonesian Capital Market Directory (ICMD), financial statements, and annual report and the observation period was done from 2012 to 2018. The sampe was taken by a purposive sampling based the specified criteria. Based on the analysis result, it can be concluded that family ownership has a significant negative effect on capital structure. Independent commissionerweakens significantly the negative effect of family ownership on capital structure. Furthermore,firm sizehas a significant positive effect on capital structure, but profitability has a significant negative effect on capital structure.
References
Anderson, R.C. dan Reeb, D.M. (2003). Founding family and firm performance: evidence from the S&P 500.Journal of Finance, 58(3), 1301-1328.
Atmaja, L. S. (2010). Dividend and debt policies of family controlled firms: The impact of board in-dependence. International Journal of Managerial Finance, 6(2), 128-142.
Badu, E. A. and Appiah, K. O. (2017). The effects of board experience and independence on mitigat-ing agency conflict.Journal of Accounting in Emerging Economies, 7(4), 445–467.
Baek, H. Y., Cho, D. D., & Fazio, P. L. (2016). Family ownership, control and corporate capital struc-ture: An examination of small capitalization public firms. Journal of Family Business Manage-ment, 6(2), 169 – 185.
Chen, T., Dasgupta, S. and Yu, Y. (2014). Transpar-ency and Financing Choices of Family Firms.Journal of Financial And Quantitative Analy-sis, 49(2), 381–408
Claessens, S., Djankov, S., & Lang, L. H. (2000). The separation of ownership and control in East Asian corporations. Journal of financial Econom-ics, 58(1-2), 81-112.
Faccio, M., Lang, L. H., & Young, L. (2001). Debt and corporate governance. Working Paper. In Meet-ings of Association of Financial Economics in New Orleans.
Faccio, M., & Lang, L. H. (2002). The ultimate owner-ship of Western European corporations. Journal of financial economics, 65(3), 365-395.
Frank, M. dan Goyal. (2009). Capital structure deci-sions: which factors are reliably im-portant?.Journal of Financial Management, 38(1), 1-37.
Ghozali, I., (2016). Aplikasi Analisis Multivariete Den-gan Program IBM SPSS 23. 8th ed. Semarang: Badan Penerbit Universitas Diponegoro
Gujarati, D., & Porter, D. (2009). Basic Econometric. 5th Edition. McGraw –Hill: New York.
Jensen, C. and Meckling, H. (1976). Theory Of The Firm : Managerial Behavior , Agency Costs And Ownership Structure.Journal of Financial Econom-ics, 3(4), 305–360.
Jensen, M.C. (1986). Agency costs of free cash flow, corporate finance, and the market for takeo-vers.American Economic Review, 76(2), 323-329.
Koropp, C., Kellermanns, F. W., Grichnik, D., & Stan-ley, L. (2014). Financial decision making in fam-ily firms: An adaptation of the theory of planned behavior. Family Business Review, 27(4), 307–327.
La Porta, R., Lopezâ€deâ€Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. The journal of finance, 54(2), 471-517.
Ma, L. and Tian, G. G. (2017). Corporate opacity and cost of debt for family firms.The European Ac-counting Review, 26(1), 27–59.
Margaretha, Farah. (2014). Dasar-dasar Manajemen Keuangan. Jakarta: Dian Rakyat.
Pukthuanthong, K., Walker, T. J., Thiengtham, D. N., & Du, H. (2013). Does family ownership create or destroy value? Evidence from Canada. Inter-national Journal of Managerial Finance, 9(1), 13-48.
Purag, M. Bin and Bujang, I. (2016). Corporate gov-ernance and capital structure of Malaysian fam-ily-owned companies. Journal of Business and Re-tail Management Research, 11(1), 18–30.
Ramalho, J. J. S. and Da Silva, J. V. (2009). A two-part fractional regression model for the financial lev-erage decisions of micro, small, medium and large firms.Quantitative Finance, 9(5), 621–636.
Roger, P. and Schatt, A. (2016). Idiosyncratic risk, private benefits, and the value of family firms.Finance Research Letters,17, 235–245.
Schmid, T. (2013). Control Considerations, Creditor Monitoring, and The Capital Structure of Family Firms.Journal of Banking & Finance, 37(2), 257-272.
Shleifer, A. and Vishny, R. W. (1986). Large Share-holders and Corporate Control. Journal of Polit-ical Economy,94(3), 461–488.
Sjahrial, D. (2014). Manajemen Keuangan Lanjutan. Edisi Revisi. Jakarta: Mitra Wacana Media.
Sudana, I.M. (2011). Manajemen Keuangan Perusahaan Teori dan Praktik. Edisi pertama. Jakarta: Erlang-ga.
Tarus, D. K. and Ayabei, E. (2015). Board composi-tion and capital structur : evidence from Ken-ya.Management Research Review, 39(9), 1056–1079.
Uribe-bohorquez, M., MartÃnez-ferrero, J., & GarcÃa-sánchez, I. (2018). Board independence and firm performance: The moderating effect of institu-tional context. Journal of Business Research Jour-nal, 88, 28–43.
Wasim, F. (2016). Impact of Corporate Governance and Ownership Structure on Capital Struc-ture.International Journal of Management Sciences and Business Research, 5(11), 119–133.
Wijayanti, L. (2014). Pengaruh Kontrol Keluarga dan Komisaris Independen terhadap Kebijakan Div-iden dan Struktur Modal Pada Perusahaan yang Terdaftar di BEI.Jurnal Ekonomi dan Bisnis, 24(1), 81-89.
Downloads
Additional Files
Submitted
Published
Issue
Section
License
Copyright (c) 2020 The Indonesian Accounting Review
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
