Examining the impact of corporate governance and family ownership on corporate performance: evidence from the Indonesian Stock Exchange

Figures & data

Figure 1. Conceptual framework.

Table 1. Number of sample and research observations.

Number of data observations per year	2014	2015	2016	2017	2018	2019	2020
Agriculture	8	8	8	10	10	8	8
Mining	27	27	28	29	30	31	28
Basic and chemical industry	42	45	44	44	46	47	40
Miscellaneous Industry	28	29	29	29	28	28	23
Consumer Goods	31	33	33	32	34	35	29
Total Observation Data Per Year	136	142	142	144	148	149	128

Table

Number of data observations per industry
Primary sector	Agriculture	60
	Mining	200
Secondary Sector	Basic and chemical industry	308
	Miscellaneous industry	194
	Consumer goods	227
Total observation data (2014–2020)		989
Total registered companies		246

Table 2. Definition and measurment of variables.

Variable	Measurement	Previous research
Dependent
Corporate Performance (FP)	Accounting Based Performance: Return On Asset (ROA) & Return On Equity by Earning Before Interest & Tax (ROEEBIT)	Dey (2008), Purbawangsa et al. (2020)
	Market Stock Based Performance: Tobin’s Q & Market to Book Ratio (MBR)	Farooq et al. (2022), Gambo et al. (2019), Mishra and Kapil (2017), Rose (2016)
Independent
Corporate Governance (CG)	Scoring by ASEAN CG Scorecard (ASC)	Utama et al. (2017)
Moderating
Family Firm (FF)	A dummy variable is assigned a value of 1 when the largest shareholder holds at least a 20% ownership stake as an individual; otherwise, it is assigned a value of 0	del Carmen Briano-Turrent and Poletti-Hughes (2017), Lee and Chu (2017), Yeon et al. (2021)
Control
Firm Size (Size)	Log. Natural of Total Asset	Cornett et al. (2008), Wahyudin and Solikhah (2017), Beasley et al. (2009), Gambo et al. (2019), González et al. (2019), Hoseini et al. (2019), Saito (2008)
Leverage (Lev)	Total debt divided by total assets
Firm Age (Age)	Number of Firm Age
Regulation (Reg)	A dummy variable is assigned a value of 1 when firm is primary sector; otherwise, it is assigned a value of 0

Table 3. Descriptive statistics.

Variable	Obs	Mean	Std. Dev	Min	Max
TBQ	988	1.010	1.667	0.029	13.967
ROA	988	0.034	0.097	−0.531	0.527
GCG	988	39.381	12.64	13.878	72.69
FF	988	0.236	0.425	0.000	1.000
SIZE	988	21.941	1.538	18.667	25.818
LEV	988	1.290	2.162	−8.070	22.015
AGE	988	37.718	19.600	6.000	119.000
REG	988	0.249	0.433	0.000	1.000

Table 4. Pearson correlation test.

Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
(1) MBR	1.000
(2) ROA	0.348*	1.000
(3) TBQ	0.800*	0.514*	1.000
(4) ROEEBIT	0.559*	0.561*	0.464*	1.000
(5) GCG	0.169*	0.210*	0.243*	0.163*	1.000
(6) FF	−0.033	−0.120*	−0.112*	−0.015	−0.208*	1.000
(7) SIZE	0.066	0.101*	0.114*	0.163*	0.348*	−0.205*	1.000
(8) LEV	0.175*	−0.089*	−0.060	0.084*	0.002	0.063	0.036	1.000
(9) AGE	0.154*	0.095*	0.156*	0.167*	0.065	−0.036	0.004	−0.003	1.000
(10) REG	−0.052	−0.030	−0.097*	0.022	−0.028	0.076	0.171*	0.111*	−0.189*	1.000

***p < 0.01, **p < 0.05, *p < 0.1.

Table 5. Main results.

	(1)	(2)	(3)	(4)	(5)	(6)
Dependent variable	TBQ	TBQ	TBQ	ROA	ROA	ROA
Intercept	−0.596	−0.147	−0.373	−0.022	0.002	0.010
	(−1.009)	(−0.245)	(−0.584)	(−0.463)	(0.042)	(0.220)
GCG	0.030***	0.028***	0.033***	0.002***	0.002***	0.002***
	(6.147)	(6.027)	(5.049)	(5.882)	(5.667)	(4.243)
FF		−0.401***	0.107		−0.022***	−0.040*
		(−4.391)	(0.387)		(−3.564)	(−1.765)
GCG*FF			−0.013*			0.000
			(−1.691)			(0.873)
SIZE	0.013	0.000	0.002	0.000	−0.000	−0.000
	(0.473)	(0.017)	(0.058)	(0.190)	(−0.131)	(−0.152)
LEV	−0.028*	−0.028*	−0.027*	−0.004**	−0.004**	−0.004**
	(−1.892)	(−1.821)	(−1.801)	(−2.307)	(−2.280)	(−2.282)
AGE	0.013***	0.013***	0.012***	0.001**	0.001**	0.001***
	(2.778)	(2.834)	(2.787)	(2.523)	(2.547)	(2.634)
REG	−0.033	−0.077	−0.070	−0.005	−0.007	−0.007
	(−0.323)	(−0.710)	(−0.648)	(−0.508)	(−0.747)	(−0.769)
Fixed Effect		Included	Included		Included	Included
Adj.R^2	0.16	0.17	0.17	0.09	0.10	0.10
N	989	989	989	989	989	989
F-stat	8.513	8.065	8.084	6.940	6.746	6.307

Note: t statistics in parentheses, *p < 0.10, **p < 0.05, ***p < 0.01.

Table 6. Alternative measurements for firm performance.

	(1)	(2)	(3)	(4)	(5)	(6)
	MBR	MBR	MBR	ROE	ROE	ROE
Intercept	−0.660	0.729	0.028	−0.289**	−0.243**	−0.264**
	(−0.380)	(0.411)	(0.015)	(−2.469)	(−2.069)	(−2.198)
GCG	0.066***	0.061***	0.076***	0.004***	0.003***	0.004***
	(4.264)	(4.168)	(3.547)	(4.480)	(4.449)	(3.884)
FF		−1.241***	0.332		−0.041**	0.006
		(−4.281)	(0.417)		(−2.305)	(0.117)
GCG*FF			−0.041*			−0.001
			(−1.822)			(−0.891)
SIZE	0.013	0.000	0.002	0.015***	0.014***	0.014***
	(0.473)	(0.017)	(0.058)	(2.931)	(2.671)	(2.691)
LEV	−0.028*	−0.028*	−0.027*	0.011	0.011	0.011
	(−1.892)	(−1.821)	(−1.801)	(0.824)	(0.830)	(0.834)
AGE	0.013***	0.013***	0.012***	0.003***	0.003***	0.003***
	(2.778)	(2.834)	(2.787)	(4.405)	(4.457)	(4.501)
REG	−0.033	−0.077	−0.070	−0.009	−0.013	−0.013
	(−0.323)	(−0.710)	(−0.648)	(−0.244)	(−0.362)	(−0.347)
Fixed Effect		Included	Included		Included	Included
Adj.R^2	0.12	0.13	0.13	0.11	0.11	0.11
N	989	989	989	989	989	989
F-stat	3.853	3.646	4.062	4.324	4.205	3.965

Note: t statistics in parentheses, *p < 0.10, **p < 0.05, ***p < 0.01.

Table 7. Other robustness tests.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Dep. variable	TBQt	TBQt+1	TBQAVE	TBQt+3	ROAt	ROAt+1	ROAt+2	ROAAVE
Intercept	−0.373	−0.427	0.105	−0.300	0.010	0.013	0.014	0.011
	(−0.584)	(−0.624)	(0.151)	(−0.523)	(0.220)	(0.278)	(0.276)	(0.291)
GCG	0.033***	0.022***	0.012**	0.023***	0.002***	0.001***	0.001	0.001***
	(5.049)	(3.781)	(1.986)	(4.402)	(4.243)	(2.775)	(1.443)	(3.393)
FF	0.107	0.022	−0.192	−0.008	−0.040*	−0.039	−0.041*	−0.039**
	(0.387)	(0.090)	(−0.733)	(−0.037)	(−1.765)	(−1.642)	(−1.793)	(−2.234)
GCG*FF	−0.013*	−0.010	−0.004	−0.009	0.000	0.001	0.001	0.001
	(−1.691)	(−1.423)	(−0.530)	(−1.537)	(0.873)	(1.033)	(1.359)	(1.400)
SIZE	0.002	0.022	0.035	0.022	−0.000	0.000	0.002	0.000
	(0.058)	(0.745)	(1.115)	(0.894)	(−0.152)	(0.057)	(0.692)	(0.299)
LEV	−0.027*	−0.030**	−0.028**	−0.028**	−0.004**	−0.002	−0.002	−0.003*
	(−1.801)	(−2.136)	(−1.987)	(−2.127)	(−2.282)	(−1.017)	(−1.247)	(−1.844)
AGE	0.012***	0.010**	0.008**	0.010**	0.001***	0.000**	0.000**	0.001***
	(2.787)	(2.324)	(1.969)	(2.485)	(2.634)	(2.072)	(2.093)	(2.603)
REG	−0.070	−0.246**	−0.357***	−0.225**	−0.007	−0.015*	−0.016**	−0.013*
	(−0.648)	(−2.090)	(−2.967)	(−2.352)	(−0.769)	(−1.670)	(−2.043)	(−1.798)
Fixed Effects	Included	Included	Included	Included	Included	Included	Included	Included
Adj.R^2	0.17	0.14	0.13	0.17	0.10	0.07	0.05	0.10
N	989	988	987	989	989	988	987	989
F-stat	8.084	7.500	6.758	10.247	6.307	4.170	4.181	6.511

Note: t statistics in parentheses, *p < 0.10, **p < 0.05, ***p < 0.01.

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Data availability statement

The financial data that support the findings of this study are available from Thomson Refinitiv database. Restrictions apply to the availability of these data, which were used under license for this study. The corporate governance data are publicly available in IDX Indonesia stock exchange website.