The mediating role of growth opportunity in good corporate governance-stock return relationship

Rakha Wardhana and Bambang Tjahjadi and Yani Permatasari (2017) The mediating role of growth opportunity in good corporate governance-stock return relationship. Investment Management and Financial Innovations, 14 (3). pp. 313-321. ISSN 1810-4967 (print), 1812-9358 (online)

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Improving the welfare of its owner or shareholder and maximize shareholder value through increased firm’s value should be one of the goals in establishing a company. Consequently, it becomes essential for the company to continue to increase its value in order to retain the trust of its shareholders, for instance by conducting good corporate governance (GCG). On the other hand, from the owner’s point of view, it is important to not only evaluate the corporate governance, but also to take a look at firm’s growth opportunity, because it basically reflects the management’s productivity. Studies related to the influence of corporate governance on stock return have been extensively done before. Similarly, this research is related to the influence of growth opportunity on stock return. However, it is still difficult to find studies that combine these three variables, therefore this study aims to know the influence of good corporate governance on stock return directly and indirectly through firm’s growth opportunity by using sample data of 92 observation Corporate Governance Perception index lists in Indonesia Stock Exchange for 2010–2014. The analysis method of this research is the quantitative approach by hypothesis testing through path analysis performed with SmartPLS 3.0. The direct hypothesis result showed that: (1) good corporate governance did not have a significant influence on firm’s growth opportunity while; (2) it also had a negative influence and did not have a significant influence on stock return, and (3) firm’s growth opportunity had a significant influence on stocks return. However, the indirect hypothesis result showed that firm’s growth opportunity could not mediate the relationship between good corporate governance and stock return.

Item Type: Article
Uncontrolled Keywords: corporate governance, stock returns, growth opportunity
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD58.7-58.95 Organizational behavior, change and effectiveness. Corporate culture
H Social Sciences > HG Finance > HG4501-6051 Investment, capital formation, speculation > HG4551-4598 Stock exchanges
K Law > K Law (General) > K1-7720 Law in general. Comparative and uniform law. Jurisprudence > K7000-7720 Private international law. Conflict of laws > K7340-7512 Commercial law > K7485-7495 Business associations. Business corporations
Divisions: 04. Fakultas Ekonomi dan Bisnis > Doktoral Ilmu Akuntansi
Bambang TjahjadiNIDN0004025702
Yani PermatasariNIDN0002018902
Depositing User: Tn Sugeng Riyanto
Date Deposited: 28 Feb 2020 07:59
Last Modified: 28 Feb 2020 07:59
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