state-owned enterprises and corporate governance strength: evidence from indonesia
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abstract
background: this study investigates whether state-owned enterprises (soes) in indonesia implement stronger corporate governance than do non-soes. it can be argued that as a large dedicated institutional investor, the indonesian government has an incentive to strengthen corporate governance in soes and possesses the ability to bear the cost of implementing stronger governance. research methods: the sample of the study consists of 76 indonesia stock exchange-listed firms that are included in the kompas 100 index, ten of which are soes. two scoring systems have been employed to gauge the strength of their governance. results: it has been consistently found that soes implemented stronger governance compared to non-soes. conclusion: the findings of this study, however, may have a geographical limitation as they may only apply to indonesia or may exhibit a methodical limitation due to the assumption that a higher score index is directly proportional to stronger governance. regardless of the limitations, however, the results of this study can be used as a case study which underscores the active involvement of governments or large dedicated institutional investors in enforcing stronger corporate governance in public companies.
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Journal title:
international journal of management and business researchPublisher: islamic azad university
ISSN 2228-7019
volume 3
issue 4 2013
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