The effect of three types of agency problems on the firm performance: Evidence from Indonesia

Ni Luh Gde Lydia Kusumadewi, Ratna Wardhani

Research output: Contribution to journalArticlepeer-review

Abstract

This research examines the impact of three types of agency problems (agency problem Type I, II and III) on corporate performance. This study uses 1.760 observations of nonfinancial companies from Indonesia during 2013–2017. The results show that agency problems Type I (manager vs. shareholder) and Type II (majority vs. minority shareholder) in general positively affect performance, whereas agency problems Type III (shareholder vs. creditor) negatively affect performance. This study contributes to agency theory literature and to local and international investors that invest in the Indonesian capital market by showing that not all types of agency problems negatively affect performance.

Original languageEnglish
Pages (from-to)279-286
Number of pages8
JournalInternational Journal of Monetary Economics and Finance
Volume13
Issue number3
DOIs
Publication statusPublished - 2020

Keywords

  • Accounting-based performance
  • Agency problem
  • Firm performance
  • Indonesia
  • Market-based performance
  • Return on assets
  • ROA
  • Tobin’s Q

Fingerprint

Dive into the research topics of 'The effect of three types of agency problems on the firm performance: Evidence from Indonesia'. Together they form a unique fingerprint.

Cite this