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Relationship between family ownership, agency costs towards financial performance and business strategy as mediation

Business: Theory and Practice

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Field Value
 
Title Relationship between family ownership, agency costs towards financial performance and business strategy as mediation
 
Creator Savitri, Enni
 
Subject family ownership
agency costs
financial performance
business strategy
 
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.
 
Publisher VGTU Press Technika
 
Date 2018-05-15
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.btp.vgtu.lt/index.php/BTP/article/view/7879
10.3846/btp.2018.06
 
Source Business: Theory and Practice; Vol 19 (2018); 49-58
1822-4202
1648-0627
 
Language eng
 
Relation http://www.btp.vgtu.lt/index.php/BTP/article/view/7879/6822
 
Rights Copyright (c) 2018 Published by VGTU Press