The effect of board governance and debt policy on value of non-financial firms
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DOIhttp://dx.doi.org/10.21511/imfi.16(2).2019.04
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Article InfoVolume 16 2019, Issue #2, pp. 37-46
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Supervisory board plays an essential role to implement good governance in firm. If this governance is implemented well, the increase in firm value will occur. Related to this statement, the main question that appears is about the number and independence rate of supervisory board members needed to enhance firm value. Besides supervisory board, debt policy holds an important role for firm because of bankruptcy issue. Firm with good governance tries to avoid this issue by decreasing the amount of its debt to create high value.
The aim of this study is to test and analyze the effect of board governance, consisting of size and independence of supervisory board, and debt policy on value of non-financial firms forming the Kompas 100 Index on Indonesia Stock Exchange. To be able to generalize results on all non-financial firms forming this index, stratified random sampling method is used to take firms as the sample from the population. Method of data analysis used is fixed effect regression model.
This study infers that the number of supervisory board members has no effect on firm value, whereas board independence and debt policy have the effect on firm value: firm with high portion of supervisory board independence and the amount of debt significantly tends to have low value.
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JEL Classification (Paper profile tab)G30
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References37
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Tables7
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Figures0
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- Table 1. The number of sample and its allocation from the number of population based on stratified random sampling method
- Table 2. The detection of multicollinearity
- Table 3. The result of Harvey heteroscedasticity test
- Table 4. The result of autocorrelation test
- Table 5. Result of normality test
- Table 6. Redundant fixed effects test result
- Table 7. Estimation result of fixed regression model: the effect of supervisory board size and its independence and debt policy on firm value
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Inventory management, cost of capital and firm performance: evidence from manufacturing firms in Jordan
Ashraf Mohammad Salem Alrjoub
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Muhannad Akram Ahmad
doi: http://dx.doi.org/10.21511/imfi.14(3).2017.01
Investment Management and Financial Innovations Volume 14, 2017 Issue #3 pp. 4-14 Views: 2591 Downloads: 1929 TO CITE АНОТАЦІЯSeveral studies have examined the relationship between inventory management and firm performance. However, most of these studies ignore the impact of inventory types on the relationship. Moreover, the relationship is influenced by some factors such as cost of capital which has not been considered. This study examines the moderating effect of cost of capital on the relationship between inventory types and firm performance. The data of 48 firms for the period 2010-2016 which formed 279 firm-year observations were used in this study. With the use of Pearson correlation and panel Generalized Method of Moments (GMM) estimation, the findings show that inventory management with consideration of its types influence firm performance in the long term. In addition, it is also found that cost of capital moderates the relationship between inventory management and firm performance. However, the interaction between cost of capital and inventory types has different implications. It is suggested that firms should consider cost of capital when making decision on inventory types and align their inventory control to fit in to the changes in their business environment.
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The impact of foreign ownership on corporate governance: evidence from an emerging market
Rawan Shubita , Moade Fawzi Shubita
doi: http://dx.doi.org/10.21511/imfi.16(2).2019.09
Investment Management and Financial Innovations Volume 16, 2019 Issue #2 pp. 101-115 Views: 1856 Downloads: 266 TO CITE АНОТАЦІЯThis research explores the influence of foreign ownership on non-financial public shareholding firms in the Amman Stock Exchange (ASE). The study involved an investigation into the connection between non-Jordanian ownership and the company growth opportunity, stock liquidity, leverage, dividend policy and business output. The results highlight that foreign ownership can provide improved corporate governance practices by playing a decisive role in increasing the growth opportunity and enhancing the firms’ market valuation, as measured by Tobin’s Q. Moreover, the findings indicate that companies with foreign board membership have better operating performance and higher firm value. The rewards were reaped by foreign investors based on their superior monitoring ability, which affects the decisions made and actions taken by management.
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Does capital structure affect firm value in Vietnam?
Tien Dat Dang , Thi Van Trang Do
doi: http://dx.doi.org/10.21511/imfi.18(1).2021.03
Investment Management and Financial Innovations Volume 18, 2021 Issue #1 pp. 33-41 Views: 1667 Downloads: 1088 TO CITE АНОТАЦІЯThis study aims to examine whether the capital structure and several factors have significant influences on firm value in Vietnam. To achieve this objective, 435 non-financial listed companies have been selected from 2012 to 2019 on Vietnamese stock exchanges. Four groups of firms continue to be chosen from the total to investigate the differences in the outcomes among industries. The results altogether using the GMM method show that the impact of capital structure and other control variables on firm value is significant, yet different across industries: capital structure has a significant positive impact on firm value in the food and beverage industry, but has a significant negative effect on the value of the firm in wholesale trade and construction, as well as real estate industry, while has an insignificant influence on enterprise value considering all industries. Apart from the firm size, the impact of other control factors on firm value also indicates mixed results.
