Ownership Structure, ESG, and Financial Performance
DOI:
https://doi.org/10.61132/ijema.v1i3.147Keywords:
Foreign Ownership, Institutional Ownership, ESG Score, Financial Performance, Eviews 12.0Abstract
The aim of this research is to determine the influence of ownership structure on financial performance and the effect of ESG scores moderates the relationship between ownership structure and financial performance. The population in this study was companies listed on the Indonesia Stock Exchange for the 2020-2022 period, resulting in a sample of 183. This study used Eviews 12.0 as an analysis tool. The analytical method used is Multiple Linear Regression with the Fixed Effect Model (FEM) panel data type. The results obtained in this research are that foreign ownership has a significant effect on financial performance and ESG scores can significantly moderates the relationship between foreign ownership and financial performance. Meanwhile institutional ownership, ESG scores does not had a significant affect on financial performance, and ESG scores cannot moderates the relationship between institutional ownership and financial performance.Downloads
References
Abedin, S. H., Haque, H., Shahjahan, T., & Kabir, M. N. (2022). Institutional Ownership and Firm Performance: Evidence from an Emerging Economy. Journal of Risk and Financial Management, 15(12). https://doi.org/10.3390/jrfm15120567
Adelfang, S., & Staneker, A. (2019). The Influence of Ownership Structure on ESG Ratings.
Agustine, V. A., Angraini, H. N., Riandy, I. M., & Lastiati, A. (2022). IMPACT OF ESG SCORE ON COMPANY PROFITABILITY. www.idx.co.id.
Ahmed, Z., Hussin, M. R. A., & Pirzada, K. (2022). The Impact of Intellectual Capital and Ownership Structure on Firm Performance. Journal of Risk and Financial Management, 15(12). https://doi.org/10.3390/jrfm15120553
Akter, A., Wan Yusoff, W. F., & Abdul-Hamid, M. A. (2024). The moderating role of board diversity on the relationship between ownership structure and real earnings management. Asian Journal of Accounting Research. https://doi.org/10.1108/AJAR-10-2022-0307
Al Amosh, H., & Khatib, S. F. A. (2022). Ownership structure and environmental, social and governance performance disclosure: the moderating role of the board independence. Journal of Business and Socio-Economic Development, 2(1), 49–66. https://doi.org/10.1108/jbsed-07-2021-0094
Al-Gamrh, B., Al-Dhamari, R., Jalan, A., & Afshar Jahanshahi, A. (2020). The impact of board independence and foreign ownership on financial and social performance of firms: evidence from the UAE. Journal of Applied Accounting Research, 21(2), 201–229. https://doi.org/10.1108/JAAR-09-2018-0147
Alkurdi, A., hamad, A., Thneibat, H., & Elmarzouky, M. (2021). Ownership structure’s effect on financial performance: An empirical analysis of Jordanian listed firms. Cogent Business and Management, 8(1). https://doi.org/10.1080/23311975.2021.1939930
ALQIREM, R., ABU AFIFA, M., SALEH, I., & HANIAH, F. (2020). Ownership Structure, Earnings Manipulation, and Organizational Performance: The Case of Jordanian Insurance Organizations. Journal of Asian Finance, Economics and Business, 7(12), 293–308. https://doi.org/10.13106/JAFEB.2020.VOL7.NO12.293
Alregab, H. (2022). The Role of Environmental, Social, and Governance Performance on Attracting Foreign Ownership: Evidence from Saudi Arabia. Sustainability (Switzerland), 14(23). https://doi.org/10.3390/su142315626
Anwar Ibrahim, Z., & Atmaji, A. (2023). Executive Compensation, Institutional Ownership, and Financial Performance (A Study on Manufacturing Companies in Indonesia). Journal of World Science, 2(12), 2039–2051. https://doi.org/10.58344/jws.v2i12.509
Chen, R. (2023). Impact of ESG Score on Firms’ Performance Based on Empirical Examination of the Chinese Stock Market. In BCP Business & Management EMFRM (Vol. 2022).
Dakhlallh, M. M., Rashid, N. M. N. M., Abdullah, W. A. W., & Dakhlallh, A. M. (2019). The Effect of Ownership Structure on Firm Performance among Jordanian Public Shareholders Companies: Board Independence as a Moderating Variable. International Journal of Academic Research in Progressive Education and Development, 8(3). https://doi.org/10.6007/ijarped/v8-i3/6212
Dewi, A. L., & Ghozali, I. (2023).Earnings Management, Institutional Ownership, and Financial Performance: CSR as a Moderating Variable. Indonesian Accounting Journal, 12(1), 1. https://doi.org/10.30659/jai.12.1.1-23
Dewi, M. S., & Mulyani, E. (2020). THE INFLUENCE OF FOREIGN OWNERSHIP, LEVERAGE, CASH HOLDINGS AND DEBT MATURITY ON COMPANY FINANCIAL PERFORMANCE. Journal of Exploratory Accounting, 2(2656 3649), 2893–2911.
Diana, H., & Irman, M. (2021). Journal of Applied Business and Technology THE EFFECT OF ENVIRONMENTAL COSTS, THE FOREIGN OF OWNERSHIP AND THE SIZE OF COMPANY ON RETURN ON ASSETS & CORPORATE SOCIAL RESPONSIBILITY AS INTERVENING VARIABLE. In Journal of Applied Business and Technology (Vol. 2021, Issue 1). www.e-jabt.org
Ginanjar, G. (2017, Maret 20). BBC News Indonesia. Retrieved from www.bbc.com: https://www.bbc.com/indonesia/indonesia-39321180
Halid, S., Abdul Rahman, R., Mahmud, R., Mansor, N., & Abdul Wahab, R. (2023). A Literature Review on ESG Score and Its Impact on Firm Performance. International Journal of Academic Research in Accounting, Finance and Management Sciences, 13(1). https://doi.org/10.6007/ijarafms/v13-i1/15101
Handoyo, S., Suharman, H., Ghani, E. K., & Soedarsono, S. (2023). A business strategy, operational efficiency, ownership structure, and manufacturing performance: The moderating role of market uncertainty and competition intensity and its implication on open innovation. In Journal of Open Innovation: Technology, Market, and Complexity (Vol. 9, Issue 2). Elsevier B.V. https://doi.org/10.1016/j.joitmc.2023.100039
Hong Nguyen, T. X., Pham, T. H., Dao, T. N., Nguyen, T. N., & Ngoc Tran, T. K. (2020). The impact of foreign ownership and management on firm performance in Vietnam. Journal of Asian Finance, Economics and Business, 7(9), 409–418. https://doi.org/10.13106/JAFEB.2020.VOL7.NO9.409
Hossain, S. M. K., Sultan, Md. I., & Ahmed, Md. M. (2021). Ownership structure and firm performance: Evidence manufacturing companies listed in Dhaka Stock Exchange. International Journal of Financial, Accounting, and Management, 3(3), 227–243. https://doi.org/10.35912/ijfam.v3i3.621
Iqbal, M. (2023). ESG Score and Firm Performance: Study of Environmentally Sensitive Companies in Emerging Market Countries. Ekspektra : Jurnal Bisnis Dan Manajemen, 7(2), 130–151. https://doi.org/10.25139/ekt.v7i2.6385
Kao, M. F., Hodgkinson, L., & Jaafar, A. (2019). Ownership structure, board of directors and firm performance: evidence from Taiwan. Corporate Governance (Bingley), 19(1), 189–216. https://doi.org/10.1108/CG-04-2018-0144
Kesuma Ningrum, D., Setyowati, H., Fatih, P. A., & Widya Wiwaha Yogyakarta hasanah, S. (2022). THE INFLUENCE OF INTELLECTUAL CAPITAL AND OWNERSHIP STRUCTURE ON FINANCIAL PERFORMANCE. 2(2), 600–619.
Langgeng Harum Islami, Jumono, S., Munandar, A., & Abdurrahman, A. (2022). The Effect of Institutional Ownership and Managerial Ownership on Financial Performance Moderated by Dividend Policy. Quantitative Economics and Management Studies, 3(6), 852–859. https://doi.org/10.35877/454ri.qems1109
Makhdalena, M., Zulvina, D., Zulvina, Y., Amelia, R. W., & Wicaksono, A. P. (2023). ESG and Firm Performance in Developing Countries: Evidence From ASEAN. ETIKONOMI, 22(1), 65–78. https://doi.org/10.15408/etk.v22i1.25271
Mindayani, R., Banani, A., & Laksana, R. D. (2020). ANALYSIS OF THE EFFECT OF CAPITAL STRUCTURE, INSTITUTIONAL OWNERSHIP, FIRM GROWTH, BUSINESS RISK ON FIRM PERFORMANCE IN MANUFACTURING FIRM LISTED AT THE INDONESIA STOCK EXCHANGE.
Nur, E. W., Mukhzarudfa, & Yudi. (2020). DETERMINANT OF FOREIGN OWNERSHIP, MANAGERIAL OWNERSHIP, DEBT POLICY, AND DIVIDEND POLICY ON FINANCIAL PERFORMANCE (Vol. 6, Issue 1). https://online-journal.unja.ac.id/jaku
Ogabo, B., Ogar, G., & Nuipoko, T. (2021). Ownership Structure and Firm Performance: The Role of Managerial and Institutional Ownership-Evidence from the UK. American Journal of Industrial and Business Management, 11(07), 859–886. https://doi.org/10.4236/ajibm.2021.117053
Pablo, S. (2019, Juli 02). CNBC Indonesia. Retrieved from cnbcindonesia .com: https://www.cnbcindonesia.com/market/20190702091037-17-82015/bos-krakatau-steel-buka-bukaan-soal-kabar-phk-1300-karyawan
Partiwi, R., Fakultas, H., Dan Bisnis, E., & Akuntansi, J. (2022). THE INFLUENCE OF INSTITUTIONAL OWNERSHIP, LEVERAGE AND COMPANY SIZE ON COMPANY PERFORMANCE. 17(1). www.idx.co.id.Pasali, S. S., & Chaudhary, A. (2020). Assessing the impact of foreign ownership on firm performance by size: evidence from firms in developed and developing countries. https://ssrn.com/abstract=3692334
Qasem, A., AL-Duais, S. D., Wan-Hussin, W. N., Bamahros, H. M., Alquhaif, A., & Thomran, M. (2022). Institutional Ownership Types and ESG Reporting: The Case of Saudi Listed Firms. Sustainability (Switzerland), 14(18). https://doi.org/10.3390/su141811316
Reber, B., Gold, A., & Gold, S. (2022). ESG Disclosure and Idiosyncratic Risk in Initial Public Offerings. Journal of Business Ethics, 179(3), 867–886. https://doi.org/10.1007/s10551-021-048478
Rivandi, M. (2021). THE INFLUENCE OF OWNERSHIP STRUCTURE ON DISCLOSURE OF CORPORATE SOCIAL RESPONSIBILITY. JOURNAL OF INFORMATION, TAXATION, ACCOUNTING AND PUBLIC FINANCE, 16(1), 21–40. https://doi.org/10.25105/jipak.v16i1.6439
Saifi, M. (2019). THE INFLUENCE OF CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE ON COMPANY FINANCIAL PERFORMANCE (Vol. 13, Issue 2). https://profit.ub.ac.id
Samyukth, R. (2021). Impact of ESG Rating of Companies on the Portfolio Performance. Shanlax International Journal of Management, 8(4), 34–42. https://doi.org/10.34293/management.v8i4.3726
Sari, R., & Artikle, I. (2020). THE EFFECT OF FOREIGN OWNERSHIP AND LEVERAGE ON FINANCIAL PERFORMANCE. BALANCE: JOURNAL OF ACCOUNTING AND BUSINESS, 5(1). http://jurnal.um-palembang.ac.id/balance
Serly, S., Susanto, A., & Fedelia, J. (2023). The Influence of Corporate Governance on Company Performance with Ownership Structure as a Moderating Variable. Indonesian Accounting and Business Review, 7(2), 496–515. https://doi.org/10.18196/rabin.v7i2.20165
Sormin, S. H., Miharja, I. S., & Wisudanto, W. (2023). GENDER DIVERSITY ANALYSIS OF FINANCIAL PERFORMANCE AND CORPORATE VALUE WITH ENVIRONMENTAL, SOCIAL, GOVERNANCE (ESG) AS MODERATING VARIABLES. Sebatik, 27(2). https://doi.org/10.46984/sebatik.v27i2.2380
Subagyo, H. (2020). CORPORATE GOVERNANCE , DEBT POLICY AND PROFITABILITY RELATIONSHIP. 15(1), 170–177. http://journal.stekom.ac.id/index.php/kompakpage170
Subagyo, H. (2021). THE RELATIONSHIP OF OWNERSHIP STRUCTURE, CAPITAL STRUCTURE AND COMPANY VALUE. THE RELATIONSHIP OF OWNERSHIP STRUCTURE, CAPITAL STRUCTURE AND COMPANY VALUE.
Tjahjadi, H., & Tjakrawala, K. (2020). THE INFLUENCE OF MANAGERIAL OWNERSHIP, PUBLIC OWNERSHIP AND FOREIGN OWNERSHIP ON COMPANY PERFORMANCE.
Tong, H. (2023). The Importance of ESG in Corporate Strategy and Investment Decisions with Patagonia as an Example. Advances in Economics, Management and Political Sciences, 25(1), 88–94. https://doi.org/10.54254/2754-1169/25/20230481
Vlaviorine, E., & Widianingsih, L. P. (2023). RENEWABLE ENERGY USE, ESG SCORE, CAPITAL COSTS AND OPERATIONAL COSTS ON FINANCIAL PERFORMANCE. Journal of Contemporary Accounting, 15(2), 97–112. https://doi.org/10.33508/jako.v15i2.4423
Wijaya, C. (2019, Juli 26). BBC News Indonesia. Retrieved from www.bbc.com: https://www.bbc.com/indonesia/indonesia-49123606
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 International Journal of Economics, Management and Accounting
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.