Ownership Structure and Agency Cost Case Study on Manufacturing Company in Indonesia Stock Exchange | Zendy

Sutrisno Sutrisno | Zendy; Tiara Annisa Ulfah | Zendy

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Ownership Structure and Agency Cost Case Study on Manufacturing Company in Indonesia Stock Exchange

Author(s) -

Sutrisno Sutrisno,

Tiara Annisa Ulfah

Publication year - 2020

Publication title -

asian journal of empirical research

Language(s) - English

Resource type - Journals

eISSN - 2306-983X

pISSN - 2224-4425

DOI - 10.18488/journal.1007.2020.1012.239.244

Subject(s) - stock exchange , agency cost , foreign ownership , business , shareholder , nonprobability sampling , accounting , principal–agent problem , agency (philosophy) , stock (firearms) , population , government (linguistics) , finance , corporate governance , economics , foreign direct investment , mechanical engineering , philosophy , linguistics , demography , macroeconomics , epistemology , sociology , engineering

The frequent occurrence of conflicts of interest between shareholders and management, causing agency problems. One way to overcome this issue is to include managerial ownership (Jensen and Meckling, 1976). The purpose of this research is to examine the effect of ownership structure on agency costs. The structure of ownership consists of managerial ownership, institutional ownership, government ownership,and foreign ownership. The population in this research is manufacturers listed on the Indonesia Stock Exchange (IDX) with a sample of 102 companies taken by purposive sampling method. To test the hypothesis, the research uses multiple regression analysis with a significance level of 0.05. The results show that managerial ownership and institutional ownership have no significant effect on agency costs. Likewise, government ownership and foreign ownership also have no significant effect on agency costs.

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