Abstract
This study discusses the influence of ownership structure and corporate governance as affecting factors to liquidity policy in consumer goods industry sector of companies listed in Indonesia Stock Exchange. The dependent variable in this research is liquidity policy which can be proxied with cash holdings, while the independent variables in this research are: ownership structure that can be proxy by insider ownership and foreign ownership, and corporate governance which can be proxy by with variable board size and board composition, firm size and growth sales as a variable control. This research uses multiple linear regression method with panel data approach. The sample used 21 companies in manufacturing industry which classified into consumer goods sector during the period 2012-2015. The result of the research shows that the variable of ownership structure is only variable insider ownership which has influence to cash holding. While from the corporate governance variable, it is only board size that affect cash holding. The value of adjusted R squared in this study amounted to 92.6%.
Highlights
A company is a place to manage economic activities in order to make money (Ross, Westerfield, and Jaffe, 2010)
Corporate governance is proxied with the board size, that is, the number or the right amount of board of commissioners to perform its duties (Clara, 2015) and board composition is the size of independent commissioners to reduce the abuse of authority that may not be performed by independent commissioners (KNKG, 2006)
The four independent variables are Insider Ownership (IO), Foreign Ownership (FO), Board Size (BS), and Board Composition (BC): Insider Ownership (IO) or managerial ownership formulated by Bokpin, Isshaq, and Aboagye-Otchere (2011) is as follows: Ha4 = Board composition positively affects the liquidity policy of manufacturing companies in the consumer goods industry group listed on Indonesia Stock Exchange (IDX) in the period of 2012 – 2015
Summary
A company is a place to manage economic activities in order to make money (Ross, Westerfield, and Jaffe, 2010). Does insider ownership negatively affect the liquidity policy of consumer goods companies in Indonesia Stock Exchange (IDX) in the period of 20122015?. 2. Does foreign ownership negatively affect the liquidity policy of consumer goods companies in Indonesia Stock Exchange (IDX) in the period of 2012-2015?. To answer the question of how the influence of ownership structure and corporate governance on company liquidity policy Indonesia, this research will use samples from consumer goods industry manufacturing companies in Indonesia Stock Exchange from the period of 2012 until 2015. Such companies have been chosen because this type of companies has the biggest contribution by sectoral. The presence of managerial share ownership is used to reduce the potential agency costs (Nurmasari, 2015)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
