Corporate governance mechanism and cost of capital to firm value

Research output: Contribution to journalArticlepeer-review

Abstract

This study examines the use of corporate governance to the cost of capital and corporate value. Corporate governance is a set of rules which manages the relationships between stakeholders, government, internal and external parties, employees and management that are related to their rights and obligations. The proxies used for corporate governance variables are independent commissioners, board size, managerial ownership, institutional ownership and non-institutional ownership. The research method used is panel data regression. The sample used in this study is non-financial listed on the Indonesian Stock Exchange (IDX) in the period 2008-2018. The results of this study indicate that variables of corporate governance, such as independent commissioners, board size, managerial ownership and institutional ownership, have a significant influence on capital costs. The results of this study also found that variables of corporate governance mechanism such as board size, institutional ownership, and non-institutional ownership significantly influence the firm's value (Tobin's Q).

Original languageEnglish
Pages (from-to)794-807
Number of pages14
JournalInternational Journal of Innovation, Creativity and Change
Volume13
Issue number6
Publication statusPublished - 2020

Keywords

  • Corporate governance
  • Cost of capital
  • Firm value
  • Ownership
  • Tobin's Q

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