The Relationship between ownership structure and performance: Study on listed Indonesian company

Abstract

This study investigates the relationship between ownership structure and firm’s performance using annual data for 115 companies listed on Indonesian Stock Exchange for the period from 2004 to 2006. This study finds, on average, firm’s performance is dependent on ownership structure using Ordinary Least Square and Two-Stage Least Square. This paper also studies the relationship between government ownership and state-owned enterprises in 15 state-ownership enterprises listed on Indonesian Stock Exchange from 2004 to 2006. Government ownership has positive influence on state-ownership enterprises’ performance using Tobin Q as a proxy. However, when Accounting profit rate is used as a proxy for state-ownership enterprises’ performance, government ownership is not statically significant.