The effect of implementation good corporate governance mechanism on banking industry performance listed in the Indonesia Stock Exchange (BEI) in the financial year 2008 – 2012
This research aims to examine effect of implementation Good Corporate Governance mechanism on banking industry performance proxy by ROA and Tobin?s Q listed in the Indonesia Stock Exchange in the financial year 2008-2012. Purposive sampling method is used to determine the sample selection that obtained 22 samples of banks.rnThe analytical method used is the method of Panel fixed effect with cross section weight.rnThe result showed that implementation GCG mechanism effects on banking industry performance proxy by ROA are: Foreign ownership, BOD size, Firm size, and Leverage have positive effect and significant, Quality of external auditor have positive effect but there is no significant, Institutional ownership has negative effect but significant, Audit committee size and BOC activity have negative effect. While the banking industry performance proxy by Tobin's Q are: Foreign ownership, Institutional ownership, Quality of external auditor, Firm size has positive effect and significant, BOD size have positive effect but there is no significant, Audit committee, BOC activity, and Leverage have negative effect but significant. Overall the results of this study indicate that the banking industry in Indonesia has begun to implement good corporate governance in order to improve the performance of the company as well as to protect the interests of the principal.
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