Relationship between family ownership, agency costs towards financial performance and business strategy as mediation
This study investigates the relationship between family ownership, agency costs, financial performance, and companies’ business strategies. The targeted population of this study were all 143 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2007–2014. About 31% (45) of thes...
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| Format: | Article |
| Language: | English |
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Vilnius Gediminas Technical University
2018-05-01
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| Series: | Business: Theory and Practice |
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| Online Access: | https://journals.vgtu.lt/index.php/BTP/article/view/7879 |
| _version_ | 1797332770111881216 |
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| author | Enni Savitri |
| author_facet | Enni Savitri |
| author_sort | Enni Savitri |
| collection | DOAJ |
| description | This study investigates the relationship between family ownership, agency costs, financial performance, and companies’ business strategies. The targeted population of this study were all 143 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2007–2014. About 31% (45) of these manufacturing companies are family companies. The hypotheses were tested using the partial least-square (PLS) method. Our findings reveal that the companies’ business strategies are not affected by the family ownership. Family ownership and business strategies influence companies’ financial performance. Agency costs influence business strategy and financial performance, and this shows that agency costs contribute to both the increase and decrease of financial performance. Business strategy mediates the relationship between family ownership and financial performance. This shows that family companies do not concentrate on financial goals but rather on the sustainability. Business strategy influences the relationship between agency costs and financial performance. This shows that funds can be redistributed in the course of business strategy planning, which will, in turn, improve the company’s development. |
| first_indexed | 2024-03-08T07:54:07Z |
| format | Article |
| id | doaj.art-c3659efd70364fc4830c3be67dadf2ea |
| institution | Directory Open Access Journal |
| issn | 1648-0627 1822-4202 |
| language | English |
| last_indexed | 2024-03-08T07:54:07Z |
| publishDate | 2018-05-01 |
| publisher | Vilnius Gediminas Technical University |
| record_format | Article |
| series | Business: Theory and Practice |
| spelling | doaj.art-c3659efd70364fc4830c3be67dadf2ea2024-02-02T14:32:41ZengVilnius Gediminas Technical UniversityBusiness: Theory and Practice1648-06271822-42022018-05-011910.3846/btp.2018.0621406Relationship between family ownership, agency costs towards financial performance and business strategy as mediationEnni Savitri0Faculty of Economics and Business, Universitas Riau, Jl.HR. Soebrantas Km. 12,5 Panam, 28293 Pekanbaru, Riau, IndonesiaThis study investigates the relationship between family ownership, agency costs, financial performance, and companies’ business strategies. The targeted population of this study were all 143 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2007–2014. About 31% (45) of these manufacturing companies are family companies. The hypotheses were tested using the partial least-square (PLS) method. Our findings reveal that the companies’ business strategies are not affected by the family ownership. Family ownership and business strategies influence companies’ financial performance. Agency costs influence business strategy and financial performance, and this shows that agency costs contribute to both the increase and decrease of financial performance. Business strategy mediates the relationship between family ownership and financial performance. This shows that family companies do not concentrate on financial goals but rather on the sustainability. Business strategy influences the relationship between agency costs and financial performance. This shows that funds can be redistributed in the course of business strategy planning, which will, in turn, improve the company’s development.https://journals.vgtu.lt/index.php/BTP/article/view/7879family ownershipagency costsfinancial performancebusiness strategy |
| spellingShingle | Enni Savitri Relationship between family ownership, agency costs towards financial performance and business strategy as mediation Business: Theory and Practice family ownership agency costs financial performance business strategy |
| title | Relationship between family ownership, agency costs towards financial performance and business strategy as mediation |
| title_full | Relationship between family ownership, agency costs towards financial performance and business strategy as mediation |
| title_fullStr | Relationship between family ownership, agency costs towards financial performance and business strategy as mediation |
| title_full_unstemmed | Relationship between family ownership, agency costs towards financial performance and business strategy as mediation |
| title_short | Relationship between family ownership, agency costs towards financial performance and business strategy as mediation |
| title_sort | relationship between family ownership agency costs towards financial performance and business strategy as mediation |
| topic | family ownership agency costs financial performance business strategy |
| url | https://journals.vgtu.lt/index.php/BTP/article/view/7879 |
| work_keys_str_mv | AT ennisavitri relationshipbetweenfamilyownershipagencycoststowardsfinancialperformanceandbusinessstrategyasmediation |