This study aimed to provide empirical evidence about the effect of industry's gap compensation and family firm on risk preferences. This research observed 1282 data from 299 companies sample from Indonesia Stock exchange (BEI) over 2011-2015. The results show that industry's gap compensation and family firm has negative effect on risk preferences. Empirical results not show that family firm weakens negative relationship between industry's gap compensation and risk preferences. Implication of this research is the importance of standard amount of compensation to directors based on task and responsibility that is given to them. It will prevent opportunistic behavior of directors in risk-taking policies.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.