Konsentrasi Kepemilikan, Transaksi Pihak Berelasi, dan Kinerja Perusahaan

Abstract

Agency theory describe that ownership concentration is a good corporate governance system that helps to reduce agency problems arising from the divergence of interest between shareholders and managers. But, when ownership concentration becomes high, lead to another agency problem that is conflict between controlling shareholders and minority shareholders. This study purposed to examine the relation of ownership concentration and related party transactions on firm performance. This research uses quantitative descriptive method with associative approach. Sample used in this study was 474 manufacturing companies listed on the Indonesia Stock Exchange in 2014-2018. We used multiple linear regression as analysis technique. Results showed that ownership concentration had a positive effect on firm performance and related party transactions had a positive effect on firm performance.
 Keywords : Ownership Concentration; Related Party Transactions; Firm Performance.

Effect of Blockholder Ownership on the Related Party Transactions to the Financial Industries

“…Majority companies in Indonesia use concentrated ownership structure (Pangesti & Hidayat, 2019). There are about 71% of company cases in Indonesia that are managed and concentrated to the family (Herliana, 2018).…”

Determinats Of The Amount Of Related Party Transaction: Tax Expense And Institutional Ownership

“…Most of the companies in Asia have a concentrated ownership structure, one of which is Indonesia. Concentrated ownership illustrates that most company ownership is concentrated in one party or a few parties, so that party has control of business activities in the company (Pangesti et al, 2019). The existence of ownership concentration makes the majority shareholder have a big enough role in decision making.…”

“…However, the more concentrated an ownership will lead to another agency conflict, namely between majority shareholders and minority shareholders. With control rights that are owned by the majority shareholder, they can carry out practices that can harm minority shareholders through related party transactions (RPT) (Utama, 2015;Pangesti and Hidayat, 2019).In order to minimize this, there is anOtoritasJasaKeuangan (OJK) Regulation, Number IX.E.1 concerning Affiliated Transactions and Conflict of Interest Transactions that require disclosure of information to the public.…”

“…One of the related party transaction activitiesthat can harm the company is when the transaction indicates cash flow tunneling. According to Atanasov et al, (2015) in Pangesti et al, (2019) cash flow tunneling is a transaction thattransfers cash or other current assetsout of public company to a related party. For example, is making a sale with a related company at a lower price than an unrelated company.…”

“…However, the low ETR is not always for the efficiency of the company becauseit can also be driven the opportunistic actions of the majority shareholder. Pangesti et al (2019) explain that control right control rights owned by the majority shareholder in decision making, can push management to perform opportunistic actions that fulfill the interests of the majority shareholder. The coalition between management and majority shareholders that occurs can cause information bias and harm minority shareholders.…”